A catastrophe theory of urbanization: Formalization and testing

The urbanization dynamic has been characterized by the persistence of very low urban populations in pre-modern societies, followed by a dramatic increase in the rate of urbanization during what Kuznets called "modern economic growth," in turn followed by a slowdown in the rates of urbanization in mature societies as the percent urban approaches the high nineties. This dynamic can be produced by the transition from a low level stable equilibrium to a high level stable equilibrium corresponding to a cusp catastrophe. In this paper, an economic theory yielding this type of dynamic is discussed, formalized, and then successfully tested using empirical data.