Michael Cohen, The New School, in this lecture illustrates data about economic growth that demonstrate how cities act as engines of national economic development.

mp3 iconUrban Economy in the New Millennium - Michael Cohen


Michael Cohen in this lecture illustrates data about economic growth that demonstrate how cities act as engines of national economic development. In 2008, for the first time in human history, half the world’s population lived in urban areas. Due to agglomeration economies, approximately 80 percent from global GDP is coming out of urban-based economic activities; 600 urban centers generate about 60 percent of global GDP.

Yet, without the right focus, agglomeration economies can have deleterious negative externalities, such as harmful environmental effects, urban poverty, and intra-urban inequalities. In addition, the lecture addresses the issue of climate change, which represents a major threat to cities.

The city is the space of opportunity for growth. Cities can also serve as a remedy in periods of economic crisis and help sustain employment. Since 2009, G-20 discussions have reduced their attention to urban employment even though most of the “demand” which governments wish to stimulate exists within cities. The stimulus package after the Global Crisis in 2008 did not focus enough on urban issues. This resulted in reduced investments into the urban arena, which in turn increased urban poverty and unemployment, worsened the distribution of income, and lead to growing squatter settlements.This lecture suggests that the productive side of the city needs more attention in urban planning.

Propositions for addressing the issue:

  1. Statistical trends indicate the large share of urban contributions to national economic development. This confirms the assumption that cities are opportunities for growth and sustainable development.
  2. Cities can serve as remedies in times of global crisis.
  3. A neglect of this trend leads to reduced investments in urban areas. This in turn increases negative externalities from agglomeration economies, which can have adverse effects on the entire country.
  4. Almost 50 percent of all cities are already dealing with the effects of climate change. Especially urban flooding causes a serious and growing development challenge.
  5. Urban governments, in coalition with various actors, need to produce a broader, comparative, empirical framework that can examine more deeply what is happening to capital and labor in relation to urban growth.
  6. Land and land policies are central to this process.


Michael Cohen (Ph.D., University of Chicago) is Director of the International Affairs Program. Before coming to the New School in 2001, he was a Visiting Fellow of the International Center for Advanced Studies at New York University. From 1972 to 1999, he had a distinguished career at the World Bank. He was responsible for much of the urban policy development of the Bank over that period and, from 1994-1998, he served as the Senior Advisor to the Bank’s Vice-President for Environmentally Sustainable Development. He has worked in over fifty countries and was heavily involved in the Bank’s work on infrastructure, environment, and sustainable development. He is a member of the U.S. National Academy of Sciences Panel on Urban Dynamics. He has taught at the University of California at Berkeley, The Johns Hopkins University, and the School of Architecture, Design, and Urban Planning of the University of Buenos Aires.