Susanne Frick, Andrés Rodríguez-Pose, 20 October 2017

Big cities have historically been seen as an important prerequisite for a country’s economic growth. In recent decades, however, developing countries have rapidly urbanised, and large cities are increasingly found in relatively poor countries. This column uses a new dataset to revisit the relationship between city size and economic growth. It finds that relatively small cities (with populations under three million) have been more conducive to economic growth, while very large cities are only growth-enhancing in countries with a very large urban population.

Jessie Handbury, David Weinstein, 07 November 2014

It’s a common perception that big cities are expensive. This column argues that most of the variation in prices across cities can be attributed to flaws in the conventional indexes. One problem with the standard methodology is that it compares prices of similar but not identical goods. A second issue is that most price indexes do not adjust for the availability of goods across locations. Correcting for these two problems, the authors find that grocery prices are actually lower in large cities. 

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