The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Systems of Cities

  • J. Vernon Henderson
Reference work entry


Research on systems of cities examines five issues. How do cities form and what are the agglomeration benefits driving city formation and sizes? Second, in a hierarchy of cities, what is the role of big versus small cities? Third, how does a system of cities evolve under economic and population growth; and how does urban growth based on localized knowledge spillovers potentially define national economic growth? Fourth, how do governance, institutions, and public policy affect city formation and sizes? Finally where do cities locate and what the effects of history, climate and natural resource location?


Agglomeration Cluster analysis Congestion Endogenous growth models Geography Gibrat’s Law Henry George Theorem Human capital Industry concentration Information spillovers Innovation Knowledge externality Monopolistic competition Nash equilibrium New economic geography Protection Quality-ladder model Systems of cities Transport costs Urban agglomeration Urban growth Urban specialization Zipf’s Law Zoning regulation 

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I thank Yannis Ioannides and Will Strange for helpful comments on the first draft.


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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • J. Vernon Henderson
    • 1
  1. 1.