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Urban Productivity and Factor Growth in the Late Nineteenth Century

  • Bostic, Raphael W.
  • Gans, Joshua S.
  • Stern, Scott

This paper uncovers a series of empirical facts regarding the sources of U.S. urban growth in the 1880s. We use a large theoretical literature to provide motivations for a number of potential sources of growth, particularly those based on geographical proximity externalities. These sources are characterised and linked to empirical proxies. Then we estimate the covariation of these empirical proxies with the growth rate in output, capital and labor respectively. We find that traditional (neoclassical), several geographic externality, and socio-political factors all covary significantly with aggregate growth, though in very specific ways. For example, the size of a city (a measure of the degree of urbanization) is uncorrelated with output growth, positively correlated with labor growth, and negatively correlated with capital growth. No one extant theory of growth accounts simultaneously for all the phenomena that we observe.

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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 41 (1997)
Issue (Month): 1 (January)
Pages: 38-55

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Handle: RePEc:eee:juecon:v:41:y:1997:i:1:p:38-55
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  1. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
  2. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  3. J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992. "Industrial Development in Cities," NBER Working Papers 4178, National Bureau of Economic Research, Inc.
  4. Fujita,Masahisa, 1989. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521346627.
  5. King, R.G. & Rebelo, S.T., 1989. "Transitional Dynamics And Economic Growth In The Neoclassical Model," RCER Working Papers 206, University of Rochester - Center for Economic Research (RCER).
  6. Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
  7. Charles R. Hulten & Robert M. Schwab, 1993. "Endogenous Growth, Public Capital, and the Convergence of Regional Manufacturing Industries," NBER Working Papers 4538, National Bureau of Economic Research, Inc.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  9. Miyao, Takahiro, 1987. "Dynamic urban models," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 22, pages 877-925 Elsevier.
  10. Paul M. Romer, 1989. "Human Capital And Growth: Theory and Evidence," NBER Working Papers 3173, National Bureau of Economic Research, Inc.
  11. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-52, December.
    • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  12. repec:oup:qjecon:v:106:y:1991:i:2:p:407-43 is not listed on IDEAS
  13. Rosenberg, Nathan, 1963. "Technological Change in the Machine Tool Industry, 1840–1910," The Journal of Economic History, Cambridge University Press, vol. 23(04), pages 414-443, December.
  14. Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters, in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64 National Bureau of Economic Research, Inc.
  15. Julio J. Rotemberg & Garth Saloner, 1990. "Competition and Human Capital Accumulation: A Theory of Interregional Specialization and Trade," NBER Working Papers 3228, National Bureau of Economic Research, Inc.
  16. J. Vernon Henderson, 1994. "Externalities and Industrial Development," NBER Working Papers 4730, National Bureau of Economic Research, Inc.
  17. David, Paul A. & Rosenbloom, Joshua L., 1990. "Marshallian factor market externalities and the dynamics of industrial localization," Journal of Urban Economics, Elsevier, vol. 28(3), pages 349-370, November.
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