Over the past few decades, large cities and metros have captured a disproportionate share of economic growth, while smaller places have seen significant economic decline. But what exactly accounts for such a divergent economic pattern?
A new study by economist Jordan Rappaport of the Federal Reserve Bank of Kansas City sees two very basic factors at work: the size and density of cities. On one hand, size (in terms of population and employment) is a huge advantage. ... But, on the other hand, density cuts the other way and can slow growth for very large places. This would seem to be at odds with urban theories from Jane Jacobs and others, that view density and clustering as an essential spur to innovation.
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