Looking for Multiple Equilibria When Geography Matters: German City Growth and the Wwii Shock

By E. M. Bosker, S. Brakman, H. Garretsen, Marc Schramm. Social Science Research Network, 2005

205 citations recorded by the source corpus.

Many modern trade and growth models are characterized by multiple equilibria. In theory the analysis of multiple equilibria is possible, but in practice it is difficult to test for the presence of multiple equilibria. Based on the methodology developed by Davis and Weinstein (2004) for the case of Japanese cities and WWII, we look for multiple equilibria in a model of German city growth. The strategic bombing of Germany during WWII enables us to assess the empirical relevance of multiple equilibria in a model of city-growth. In doing so, and in addition to the Davis and Weinstein framework, we look at the spatial inter-dependencies between cities. The main findings are twofold. First, multiple equilibria seem to be present in German city growth. Our evidence supports a model with 2 stable equilibria. Second, the explicit inclusion of geography matters. Evidence for multiple equilibria is weaker when spatial interdependencies are not taken into account.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/bdff1b57f6ad43afae037646f69740c4192d9ddf

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Citations in the corpus

The Permanent Effects of Transportation Revolutions in Poor Countries: Evidence from Africa (2016, unknown): “…the literature has also found support for the presence of local increasing returns and that localized historical shocks can have permanent effects (Bosker et al., 2007, 2008; Redding, Sturm, & Wolf, 2011; Bleakley & Lin, 2012; Michaels & Rauch, 2013; Ahlfeldt et al., 2014; Jedwab, Kerby & Moradi,…”
History and Industry Location: Evidence from German Airports (2011, unknown): “Two exceptions are Bosker et al. (2007) and Bosker et al.”
What Happened to Kobe? A Reassessment of the Impact of the 1995 Earthquake in Japan (2012, background): “A series of papers, initially inspired by Davis and Weinstein (2002), investigated the long‐ term impact of large‐scale war‐related destruction using geographically‐detailed bombing data from World War II Japan (Davis and Weinstein, 2008), the American‐Vietnam War (Miguel and Roland, 2011), and Germ”
The empirics of new economic geography (2010, unknown): “…(2002)’s preferred interpretation of their empirical findings for Japan is that they provide support for a hybrid theory, in which 13In contrast, Bosker et al. (2007, 2008) find some evidence of a permanent effect of the Second World War on the spatial distribution of economic activity within…”
Regional Resilience in Italy: A Very Long-Run Analysis (2014, background): “On the one side, a line of literature has developed, within economic geography, dealing with the effect of ‘major shocks’, such as war bombing on city growth (DAVIS and WEINSTEIN, 2002; BOSKER et al., 2007) or severe political change (REDDING and STURM, 2008).”
Growth in a Cross-section of Cities: Location, Increasing Returns or Random Growth? (2015, unknown): “Empirical economists on urban economics and economic geography have debated over the suitability of each of these theories for different periods and countries, see for example, Davis & Weinstein (2002) or Bosker et al. (2008), and the literature review in the next section. The availability of census”
A Century of Shocks: The Evolution of the German City Size Distribution 1925-1999 (2008, unknown): “In previous work, Brakman et al. (2004) and Bosker et al.”
Locomotives of Local Growth: The Short- and Long-Term Impact of Railroads in Sweden (2017, background): “…contributes to an emerging literature on long-term urban development, path dependence, and the persistence of spatial equilibria (Davis and Weinstein 2002; Bosker et al. 2007; Redding and Sturm 2008; Davis and Weinstein 2008; Miguel and Roland 2011; Redding et al. 2011; Bleakley and Lin 2012).”