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What Future for History Dependence in Spatial Economics?

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Abstract

History (sometimes) matters for the location and sizes of cities and neighborhood segregation patterns within cities. Together with evidence on rapid neighborhood change and self-fulfilling expectations, this implies that nature might not completely determine the spatial structure of the economy. Instead, the spatial economy might be characterized by multiple equilibria or multiple steady-state equilibrium paths, where history and expectations can play decisive roles. Better evidence on the conditions under which history matters can help improve theory and policy analysis.

Suggested Citation

  • Jeffrey Lin & Ferdinand Rauch, 2020. "What Future for History Dependence in Spatial Economics?," Working Papers 20-47, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:89140
    DOI: 10.21799/frbp.wp.2020.47
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    7. David Krisztián Nagy, 2020. "Quantitative economic geography meets history: Questions, answers and challenges," Economics Working Papers 1774, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2021.
    8. Messner, Teresa & Rumler, Fabio & Strasser, Georg, 2022. "Cross-country price and inflation dispersion: Retail network or national border," Single Market Economics Papers WP2022/11, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team.
    9. Allen, Treb & Donaldson, Dave, 2022. "Persistence and path dependence: A primer," Regional Science and Urban Economics, Elsevier, vol. 94(C).
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    12. Marius Klein & Ferdinand Rauch, 2023. "Market Access and the Arrow of Time," CESifo Working Paper Series 10279, CESifo.

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    JEL classification:

    • N9 - Economic History - - Regional and Urban History
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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