A Perfect Storm: First-Nature Geography and Economic Development

Christian Vedel

Papers from arXiv.org

Abstract: Is geography destiny? What is the role of first-nature geography in determining prosperity? This paper estimates the effect of randomly removing and introducing favorable first-nature geography to a specific region using a difference in difference design. In 1825 a storm created a new natural navigable waterway, bringing trade and prosperity to the otherwise relatively isolated northwestern Denmark. 700 years prior, the same event happened in reverse, when a previous channel closed up between 1086 and 1208. The elasticity of geography-induced market access is estimated to be 1.6, corresponding to 26.7 percent population growth within a generation of the event. Demonstrated mechanisms include trade, fertility, fishing, and the rise of manufacturing. The central finding is replicated in reverse in a register of dated archaeological sites. The 1086-1208 closing caused fewer buildings and sites containing coins. The general insight is the same: First-nature geography determines the levels and location of prosperity.

Date: 2024-08
New Economics Papers: this item is included in nep-his, nep-int and nep-ure
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http://arxiv.org/pdf/2408.00885 Latest version (application/pdf)

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Working Paper: A Perfect Storm: First-Nature Geography and Economic Development (2024)
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