Granular Cities

Author:

Esquierro Leon1,Da Silva Sergio2ORCID

Affiliation:

1. Department of Economics, Federal University of Santa Catarina, Florianopolis 88049-970, SC, Brazil

2. Department of Economics, State University of Santa Catarina, Florianopolis 88035-001, SC, Brazil

Abstract

This study extends the concept of granularity from firms to cities, examining how large cities influence national economic dynamics beyond their relative size. By applying Zipf’s law, which describes the power law distribution of city sizes, we investigate the interplay between granularity and business cycles. Our aim is to test the granular hypothesis that large cities have a significant impact on the business cycle beyond their relative size. We analyze data from American and Brazilian cities between 2003 and 2019 assessing the granular residuals and their explanatory power. Our findings reveal that in the United States, the granular city size is three metropolitan areas or five counties when redefined. In Brazil, it equates to three municipalities. These results emphasize the substantial role large cities play in national economic fluctuations, suggesting that policy interventions that target infrastructure, education, and innovation in major urban centers could have widespread economic benefits. This paper’s contribution to the literature is to highlight a spatial component of granularity not considered so far.

Funder

CNPq

Capes

Publisher

MDPI AG

Reference38 articles.

1. Ades, Alberto F., and Glaeser, Edward L. (2024, June 05). Trade and circuses: Explaining urban giants. NBER Working Paper No. 4715. Available online: https://www.nber.org/system/files/working_papers/w4715/w4715.pdf.

2. Growth, innovation, scaling, and the pace of life in cities;Bettencourt;Proceedings of the National Academy of Sciences,2007

3. Urban evolution in the USA;Black;Journal of Economic Geography,2003

4. On the determination of the granular size of the economy;Alfarano;Economics Letters,2018

5. Cano, Wilson (2007). Raízes da Concentração Industrial em São Paulo, Editora Unicamp. [5th ed.].

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