| Abstract: | "This paper examines the mechanism and extent of urban concentration using a two-sector growth model. The cause of urbanization is sought in the existence of urban scale economies. Assuming that temporary production decisions are concerned with optimal labor inputs and that profit incomes are reinvested according to relative profitability, the model shows persistent tendency for urban concentration and the transition of the economy from unlimited to limited labor supply. A simple example suggests that urban concentration is more likely than rural expansion with urban contraction." |
