Thinking About Economic Growth: Cities, Networks, Creativity and Supply Chains for Ideas

Discussions of economic growth require an examination of the role of cities. It is widely claimed that c ities exi st because they facilitate economic growth and development . Spatial concentrations reduce transactions cost s . There are additional benefits gained as positive spillover effects are realized . The latter is especially impo rtant for the exchange of ideas . Creativity comes from new arrangements of thoughts and ideas . The thoughts of others facilit ate new combinations of ideas . It is argued here that p ropitious spatial arrangements make both sets of benefits possible . These arrangements involve choices from a very large combinatorial set . The choice problem is too complex to entrust to models or pla nning agencies . Rather, flexible land markets are required. This paper is based on the author’s presidential address delivered at the February 2012 meetings of the Western Regional Science Association in Kauai, Hawaii.