Quantitative economic geography meets history: Questions, answers and challenges

Abstract

A rapidly growing literature uses quantitative general equilibrium models of economic geography to study the economic impact of historical events such as the railroad revolution, industrial take-off, structural transformation and wars. I identify three key challenges facing this literature: the tractability of model structure, the availability of historical data, and issues related to identification. I review the literature by discussing how it has been addressing each of these challenges. While doing so, I point out the rich set of questions that this literature can address, as well as the methodological innovations it has conducted to answer these questions.