Urbanization and economic growth: a cointegration and causality analysis for the Ecuadorian case

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Published: dic. 6, 2021

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Priscila Méndez
Carrera de Economía, Universidad Nacional de Loja, Loja, Ecuador

Abstract

This paper analyzes the relationship between urbanization and economic growth in Ecuadorin the period 1961-2015, using time series econometric techniques. The results showthe existence of a short- and long-run relationship between urbanization and economicgrowth, as well as the causality of urban population to economic growth. Even so, it cannotbe affirmed that the externalities assumed by Henderson (2003, 2005, 2010) haveoccurred uniformly in Ecuador, at least in the period analyzed. An alternative is to use theprimacy index and observe whether urbanization is really conducive to economic growthat the national level or only in cities with larger urban populations. The suggested policyimplications are to increase the levels of capital investment (public spending on roads, betterschools, health centers, hospitals, etc.) in the cities with the largest urban populationsso that they become industrial centers that generate economic growth. It is also recommendedthat governments implement policies to ensure that the benefits of urban growthare shared equitably and sustainably.

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How to Cite
Méndez, P. . (2021). Urbanization and economic growth: a cointegration and causality analysis for the Ecuadorian case. Revista Económica, 9(1), 109–117. Retrieved from https://revistas.unl.edu.ec/index.php/economica/article/view/1153
Issue
Vol. 9 No. 1 (2021): RVE Vol 9 (January - June 2021)
Section
RESEARCH ARTICLES
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