Gabriel Ahlfeldt, Elisabetta Pietrostefani, 22 February 2019

Most countries pursue policies that implicitly or explicitly aim at promoting ‘compact urban form’, but so far these policies have not been well-grounded in evidence. This column summarises the state of knowledge on the economic effects of density on various economic outcomes. It concludes that densification policies may lead to aggregate welfare gains, but there may be regressive distributional consequences.

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.

Ufuk Akcigit, John Grigsby, Tom Nicholas, 02 February 2017

A pressing issue facing policymakers around the globe today is how to generate long-term economic growth through technological innovation. Using a new dataset that matches 19th and 20th century patent records with census data, this column attempts to shed some light on the ‘golden age’ of US innovation. Population density and financial development are found to be important determinants of state innovativeness, while education appears to be the critical input at the individual level. These findings have important implications for innovation policy today.

Matthew Jaremski, David Wheelock, 25 October 2015

The US’s Federal Reserve System was established more than a century ago as a confederation of 12 regional districts. The selection of cities for each region’s Reserve Bank disproportionately favoured the Northeast and the state of Missouri, a fact that remains controversial to this day. This column describes how the existing banking infrastructure and population density at the time, guided the selection of these cities. Modern communication technology has reduced the need for physical proximity between Reserve and commercial banks. Debates about rezoning the Federal districts should therefore focus on the distribution of monetary policymaking authority.


CEPR Policy Research