National GDP is basically a myth; the real economy is just a giant web of cities that grow together regardless of borders.
arXiv · March 18, 2026 · 2603.16007
The Takeaway
We typically view the 'national economy' as the fundamental unit of growth, but cities actually cluster into 17 distinct global regimes where shocks travel by structural similarity rather than geographic proximity. A city in Europe may be more economically synchronized with a city in Asia than with its own rural hinterland, making national-level data a misleading aggregation of unrelated local trends.
From the abstract
Economic growth is conventionally analyzed at the national level, yet cities generate the bulk of global output. Here we construct GDP trajectories for 8,808 functional urban areas (FUAs) across 165 countries over 1993-2019 using satellite-derived nighttime light data and identify 17 distinct, persistent growth regimes through clustering of full temporal trajectories. Rather than converging toward a common frontier, FUAs inhabit distinct economic niches-analogous to ecological niches-defined by