Looks at urbanization from an economic geography standpoint to simulate Bangladesh's path to middle-income status, taking into account its unique urban features and the experience of countries that have already undergone this transformation. The correlation between urbanization, urban economic density, and gross domestic product (GDP) is indicative of the productivity advantage of urban areas. In Bangladesh, the output and productivity differential between urban and rural areas is larger than the population density differential. Bangladesh needs to increase economic density in its largest metropolitan areas, which requires shifting toward a higher-value-added industrial and service mix in Dhaka and Chittagong, and also needs to increase the percentage of the population engaged in nonfarm employment. Empirical evidence suggests that urban diversity and knowledge spillovers across rather than within industries matter for long-term growth. Bangladesh's spatial economic paths to lower-middle-income country status are unique because of the country's exceptionally high population density (the highest in the world).