Geography and Space in Recent Economic History

In this survey, I discuss the literature on historical economic geography that followed from both new economic geography (NEG) and the gravity model, with a focus on applications in economic history since 1991, especially in Europe and Germany. This discussion is organized around four themes: the starting point is the measurement of market potential and its components over the long-run. This includes attempts to estimate regional GDP, as well as changes in the accessibility of markets due to changing transportation costs, tariffs or political borders. Next, I discuss various attempts to measure the effect of market potential (or its components) on economic outcomes, that can be seen as direct empirical tests of NEG models. I also discuss several papers that try to identify the underlying microeconomic mechanism behind market potential , notably localized externalities, spillover effects, and the interplay between changes in transport infrastructure and structural change. Finally, I consider a literature which has examined the non-ergodicity implied by NEG theory, namely path dependence and multiple equilibria. I conclude with some suggestions for further research.