There is increasing evidence that cities offer externalities that raise labour productivity. This column looks at the contribution of US cities to productivity growth at the turn of last century. The findings show that increased specialisation, promoted by improved transportation, was the key to productivity growth. Today’s policymakers should heed this lesson.
Nicholas Crafts, Alex Klein, Thursday, July 30, 2015
Dominick Bartelme, Yuriy Gorodnichenko, Friday, June 26, 2015
Specialisation has been extensively researched at the micro and macro levels, but the middle one has received little attention. This column argues that the middle level – linkages across firms and industries within a country – can be important in economic development. Having built a database of input-output tables for a broad spectrum of countries and times, the authors show that countries with stronger linkages have indeed higher productivity.
Pablo Fajgelbaum, Stephen Redding, Saturday, July 12, 2014
External integration is often viewed as an important driver of economic development, but most existing studies use aggregate data. This column present evidence from a natural experiment provided by Argentina’s integration into the world markets in the late 19th century. The findings suggest that proximity to trade centres is associated with employment density, high lands rates relative to wages, and structural transformation away from agriculture.