Gibrat's Law for (All) Cities
Top Cited Papers
- 1 December 2004
- journal article
- research article
- Published by American Economic Association in American Economic Review
- Vol. 94 (5) , 1429-1451
- https://doi.org/10.1257/0002828043052303
Abstract
Two empirical regularities concerning the size distribution of cities have repeatedly been established: Zipf's law holds (the upper tail is Pareto), and city growth is proportionate. Census 2000 data are used covering the entire size distribution, not just the upper tail. The nontruncated distribution is shown to be lognormal, rather than Pareto. This provides a simple justification for the coexistence of proportionate growth and the resulting lognormal distribution. An equilibrium theory of local externalities that can explain the empirical size distribution of cities is proposed. The driving force is a random productivity process of local economies and the perfect mobility of workers.This publication has 18 references indexed in Scilit:
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