How Density Can Deter Growth in America’s Largest Metros

Over the past few decades, large cities and metros have captured a disproportionate share of economic growth, while smaller places have seen significant economic decline. But what exactly accounts for such a divergent economic pattern?

A new study by economist Jordan Rappaport of the Federal Reserve Bank of Kansas City sees two very basic factors at work: the size and density of cities. On one hand, size (in terms of population and employment) is a huge advantage. Bigger places inexorably grow bigger. And this is especially true for relatively large cities (up to 500,000 people) with plenty of space to grow. For these places, their initially large populations beget faster growth over time.