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Clusters policies have become a key focus for policy makers in recent years. This book looks at the development of clusters of economic activity and their importance in shaping industrial and public policy. It examines the success and failures of policy in France and extrapolates its findings to the rest of the world.

Abstract.  This paper reviews the evidence about the effects of urbanization and cities on productivity and economic growth in developing countries using a consistent theoretical framework. As in developed economies, there is strong evidence that cities in developing countries bolster productive efficiency. Regarding whether cities promote self‐sustained growth, the evidence is suggestive but ultimately inconclusive. These findings imply that the traditional agenda of aiming to raise within‐city efficiency should be continued. Furthermore, reducing the obstacles to the reallocation of factors across cities is also desirable.

This paper reviews the evidence about the effects of urbanization and cities on productivity and economic growth in developing countries using a consistent theoretical framework. Just like in developed economies, there is strong evidence that cities in developing countries bolster productive efficiency. Regarding whether cities promote self-sustained growth, the evidence is suggestive but ultimately inconclusive. These findings imply that the traditional agenda of aiming to raise within-city efficiency should be continued. Furthermore, reducing the obstacles to the reallocation of factors across cities is also desirable.

With the use of French and US data, new and systematic evidence is provided about the rapid location changes of industries across cities (the fast). Cities are also slowly moving up and down the urban hierarchy (the slow), while the size distribution of cities is skewed to the right and very stable (the still). The model proposed here reproduces these three features. Small, innovation-driven shocks lead to the churning of industries across cities. Then, cities slowly grow or decline following net gains or losses of industries. These changes occur within a stable distribution. The quantitative implications of the model are also explored. (JEL R12, R32)

ABSTRACT
This paper takes seriously the idea that international trade has played an important role in explaining both some convergence between developed economies as well as rising inequalities at the personal level. Previous studies used traditional trade theory as a reference framework. The empirical consensus is now that differences in factor endowment explain at best a small fraction of rising wage inequalities. This argument, by contrast, builds on labor specialization and increasing returns. Deeper economic integration allows trade in differentiated intermediate goods and primary tasks, thus transforming local increasing returns into global increasing returns. This pushes towards geographical equalization. At the same time, deeper integration also increases the size of the pool of available skilled workers. This may lead them to a'technological secession'as it makes more skill‐demanding technologies more profitable. Technological secession in turn fosters wage inequalities at the personal level.

Key reasons for the existence of cities are the externalities created when people cluster together in close proximity. During the COVID-19 pandemic, such interactions came with health risks and people found other ways to interact. This article documents how cities changed during COVID-19 and considers how the persistence of new ways of interacting, particularly remote work, will shape the development of cities in the future. It first summarizes evidence showing how residential and commercial prices and activity adjusted at different distances from dense city centers during and since the pandemic. The analysis employs a textbook monocentric city model to demonstrate that two adjustments associated with remote work—reduced commuting times and increased housing demand—generate the patterns observed in the data. The authors then consider how these effects might be magnified by changes in urban amenities and agglomeration forces, and what such forces might mean for the future of cities.