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"This paper proposes a simple theory of a system of cities that decomposes the determinants of the city size distribution into three main components: efficiency, amenities, and frictions. Higher efficiency and better amenities lead to larger cities, but also to greater frictions through...
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efficient operation of cities by facilitating business activities and improving worker productivity. The literature has devoted … productivity show positive, but in some cases statistically insignificant, effects of public capital stock on productivity. Most of … the productivity of firms in urban areas. More research is needed to explore the interrelationships between urban size and …
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