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A Perfect Storm: First-Nature Geography and Economic Development

Christian Vedel

Papers from arXiv.org

Abstract: In 1825 a storm cut a new channel through Denmark's Limfjord, providing an exogenous shock to first-nature geography. Difference-in-differences estimates show the channel increased trade immediately and, within a generation, lifted population by 26.7 percent - an elasticity of 1.6 relative to the improved market access. Higher fertility and economic growth of new industries, not migration, drove the expansion. A mirror experiment - the waterway's closure circa 1086-1208 - caused symmetric declines in medieval coin and building finds, bolstering external validity. These results offer the first robust causal evidence that first-nature geomorphology shapes the location of economic activity.

Date: 2024-08, Revised 2025-05
New Economics Papers: this item is included in nep-his, nep-int and nep-ure
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Citations: View citations in EconPapers (1)

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