URBAN

ECONOMIC

GROWTH

EKONOMI WILAYAH KOTA

Andira Reoputra, ST, Dipl, MAURP. Email: reoputra.andira@gmail.com

Dynamics of Urban Economic

Urban growth (Sprawl)-Land use changes, urban typology Lifestyle (consumerism), goods VS population Production and Investment in urban will increasing the urban economic

Targets of Urban Economic

Some cities grow at healthy rate (Urban economic Growth) Assessing the size of urban economic (goods and services) Has some systems to process the urban economic (Input-process-output)

Urban Economic
At city level: Production function between input to the production process and total output. q=f (k.l.r.t) k: amount of capital used (equipment) l : amount of labor r : amount of natural resources

t : measure technology knowledge

Urban Economic
Metropolitan level: Production function to relate total input usage to total output for urban economic The production function could be written as: Q=f (K.L.R.T)

Urban Economic
Urban economic growth result from

technological progress or increases in the quantities of output used by firm in the metropolitan area. Without firm, technology and input the urban economic cant grow.

Indicators of Urban Economic

The Multiplier Process (Multiplier effects) Urban labor market and economic growth

The Multiplier Process

Production of goods (export and basic production) should be sold outside the city. Production of goods (export and basic production) should be sold within the city.

The Multiplier Process

Outside the city computer manufacturer products are sold outside the city Within the city Bakeries, bookstores, salons are sold within the city

The Multiplier Process

Increases in local spending

from increased export sales

Increase in Round 1 Round 2 Round 3 Total

Local income Local consumption Imports

$1,000 600
400

600 360
240

360 216
144

2.500 1500
1000

The Multiplier Process

The Urban Labor Market

Model of labor market in Metropolitan Part of regional economic Has profit for urban economic Population for labor; household and firms are mobile It can move freely between city and region

The Urban Labor Market (components)

Labor demand (negative way)

Labor supply (positive way)

The Urban Labor Market

Labor demand input effect: wage or salary is important in some companies to setting the urban labor market. output effect: companies that produce the large production requires a lot of labor.

The Urban Labor Market

Labor demand (some concepts) Demand for export Labor productivity Business tax Industrial public services Land use policies

The Urban Labor Market

Labor Supply Increasing the salary is increasing the urban economic Causing the migration workers outside the city in the region Has a number of work hours per laborer is fixed (there is no effect to change the

salary)

The Urban Labor Market

Labor Supply (some concepts) Environmental quality Residential taxes Residential public services

Localization Economies and Learning

Urban growth: increases in the demand for workers (labor demand) Respond to increase the demand for software (no additional labor) There is no improvement for labor in the firm

Localization Economies and Learning

Three sources of localization economies; 1. Scale economic in intermediate goods (decreasing production costs to expand the production and hire more workers) 2. Labor market pooling (Incorporation the workers, to reduce the labor costs) 3. Knowledge spillover (more information

and more technology)

Reference
1. Urban economic (Arthur Osullivan, 2003) 2. Journal 3. UNDP of environmental Nation economic management (United Development Program, 2010)

TERIMA KASIH

Andira Reoputra, ST, Dipl, MAURP.

Email: reoputra.andira@gmail.com