While we live in a globalised world, the concentration of activity in cities continues to drive economic growth

More than 80 percent of Americans live in urban areas, and cities are the source of much of the country’s economic activities. But to what extent do cities drive economic growth, and how dense do they have to be? In new research which examines 50 US metropolitan areas with more than 1 million people, Patricia Melo finds that an increase in urban employment density – or agglomeration – by 10 percent is associated with a rise of approximately one percent in average worker productivity, but that these benefits are very localised in terms of distance as measured by travel times.