Optimal process of urbanization in a developing country dynamic Henry George theorem

Urbanization is going on in China. This paper considers the optimal process of urbanization in a theoretic framework. We already have the Henry George theorem, which asserts that the optimal amount of the public goods should equal the total amount of land rent for the optimal distribution of the population over regions in a country, or optimal population size of each region. This theorem was originally developed in a static framework. We extend this theorem to a dynamic one using overlapping generations model. As the result, we derived that this theorem still holds even in a transient state as well as in the steady state under some types of the utility the production functions. Copyright Springer-Verlag Berlin Heidelberg 2014