Abstract:
Urbanization is a dynamic procedure of shifting the rural population to urban primacy. There
exists a historical relationship between urbanization and economic advancement. In this study, the association between economic growth and urbanization pattern and by considering the data
on urbanization and economic growth from 1981-2021 in Ethiopia is investigated using time
series data. Unit root test, autocorrelation test, model specification test, heteroscedasticity test, stability test and co-integration test was conducted. The outcomes of the ARDL regression model
support the general notion of a positive link between the urbanization measured by urban
population share, and economic growth is measured through real GDP. Accordingly it found, found that urbanization had a significant positive impact on economic growth both in short run
and long run. Whereas except inflation rate other variables gross capital formation and labour
force has positive impact on economic growth. The speed at which disequilibrium occurred in
short run returns to long-run equilibrium is by 81 % in the current year as indicated by the
coef icient of the error term. Consequently, Policymakers should use this information to create
targeted policies for sustainable and inclusive economic development. Social and environmental
impacts of urbanization should also be considered when developing policies. Further research is
needed to understand the impact of dif erent types of urbanization, urban planning, and
technological innovation on
