America and Europe have roughly similar population levels. Yet Europe’s per person GDP is just 72% of America’s. The Economist argued that the size of Europe’s cities might be to blame:

• America’s largest cities house 164 million people. In Europe it is just 102 million.
• Cities are important for economic growth because there is knowledge spillover within them. When one person or company finds a new, more efficient way to do something, others soon copy it.
• They are also important because today’s innovations requires experts from various different fields to come together, and this is easier to do in a city.
• Europe’s cities may have remained small because of regulations. Zoning laws might help explain it. Linguistic barriers across Europe might also be a contributing factor.

Read more about what happens when a prominent researcher moves to a different city, how American cities compare to European ones, and what this means for Europe over here.

Source: The Economist