May 24th, 2015
from the Philadelphia Fed
It's common for neighborhoods, cities, and regions to experience changes in fortune over time. Yet, many places exhibit intriguing persistence in their relative economic development. From ancient Japan to Roman and medieval Europe to the pre-Columbian Americas, age-old development patterns are strongly correlated with present-day geographic distributions of population and income.
Such extreme spatial persistence may be relevant for urban policy today. Why haven't these urban patterns changed over decades, centuries, or even millennia? Is such persistence desirable? And what does persistence imply about the prospects for "place-making" policies aimed at generating development in or attracting it to particular locations? Remarkable long-run persistence in the relative sizes and incomes of regions appears to be common. For example, in Latin America, the distribution of population before European exploration and conquest began in 1492 is strongly correlated with present-day distributions of population and income.
Similarly, the spatial distribution of economic activity in Europe today is strongly correlated with the location of trading routes and commercial centers in the 14th and 15th centuries.2 As I will discuss, other studies have found similar persistence over centuries or even millennia in the U.S., Britain, Japan, and Africa.