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The Settlement of the United States, 1800 to 2000: The Long Transition towards Gibrat's Law

  • Desmet, Klaus
  • Rappaport, Jordan

This paper studies the long run development of U.S. counties and metro areas from 1800 to 2000. In earlier periods smaller counties converge whereas larger counties diverge. Over time, due to changes in the age composition of locations and net congestion, convergence dissipates and divergence weakens. Gibrat's law emerges gradually without fully attaining it. Our findings suggest that orthogonal growth is a consequence of reaching a steady state population distribution, rather than an explanation of that distribution. A simple one-sector model, with entry of new locations, a growth friction, and decreasing net congestion closely matches these and related dynamics.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9353.

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Date of creation: Feb 2013
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Handle: RePEc:cpr:ceprdp:9353
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  1. Taryn Dinkelman & Sam Schulhofer-Wohl, 2015. "Migration, Congestion Externalities, and the Evaluation of Spatial Investments," NBER Working Papers 20842, National Bureau of Economic Research, Inc.
  2. Kris J. Mitchener & Ian W. McLean, 1998. "U.S. Regional Growth and Convergence, 1880-1980," School of Economics Working Papers 1998-04, University of Adelaide, School of Economics.
  3. Guy Michaels & Ferdinand Rauch & Stephen Redding, 2008. "Urbanisation and Structural Transformation," CEP Discussion Papers dp0892, Centre for Economic Performance, LSE.
  4. Südekum, Jens & Giesen, Kristian, 2013. "City Age and City Size," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79996, Verein für Socialpolitik / German Economic Association.
  5. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 739-767.
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