Technological progress and the urbanization process

I build a model with a microfoundation to understand how productivity changes in the manufacturing and the agricultural sectors impact the relative size of a city and the surrounding rural area, both in terms of physical area and population. I also examine rural-urban differentials in land rentals. I find that the "Green Revolution" is more important than the Industrial Revolution in terms of the impact on the urbanization process. Government policies on the optimal sizes of cities are discussed.