| Chapter 1 extends the neoclassical growth model to allow for mobile labor. In a long run steady-state, individuals and firms receive equal levels of utility and profits across localities. But frictions in the form of a cost to installing capital proportional to the rate of gross investment and an analogous cost to moving proportional to the rate of net migration effect extended equilibrium transition paths during which rents will be associated with living and owning capital in some localities relative to others. The speed of income convergence is relatively insensitive to the degree of labor mobility. Persistent population flows result from relatively small changes in local productivity or quality of life; but even when population is relatively distant from its steady-state level, wages and land prices remain relatively close to their steady state levels.;Chapter 2 sketches four sets of empirical facts on economic growth across U.S. counties. A first set of facts focuses on the time series and cross-correlation properties of local economic growth as measured by net migration, per capita income growth, and housing price growth. A second and a third set of facts focus on the geographical correlates of local growth over the 20th century and the non-government correlates of local growth over the period 1970 to 1990. A fourth set of facts focuses on the government fiscal policy correlates of local growth over the period 1970 to 1990.;Chapter 3, joint with Jeffrey Sachs, focuses on the geography partial correlates of local population density across U.S. counties in 1990. We focus on the overwhelming concentration of population at ocean and Great Lake coasts and at navigable rivers. After including measures which should absorb any quality-of-life contributions from such location, we argue that the primary mechanism by which coastal location brings about high population density is a productivity effect from access to navigable water. |
