American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Long-Distance Trade and Long-Term Persistence
American Economic Journal: Macroeconomics
(pp. 318–55)
Abstract
Do changes in the location of trading opportunities cause changes in the location of economic activity? I explore this question using a lifting of restrictions on trade across the Spanish Empire in the eighteenth century. I combine a difference-in-differences approach with a dynamic spatial model to examine this issue. I find that the reform improved market integration and induced urban growth, but had a smaller effect in locations with larger internal markets. The findings show that the location of economic activity adapts to changes in the location of trading opportunities, but persists when these changes are preceded by urban growth.Citation
Ellingsen, Sebastian. 2026. "Long-Distance Trade and Long-Term Persistence." American Economic Journal: Macroeconomics 18 (4): 318–55. DOI: 10.1257/mac.20230017Additional Materials
JEL Classification
- F14 Empirical Studies of Trade
- L92 Railroads and Other Surface Transportation
- N73 Economic History: Transport, Trade, Energy, Technology, and Other Services: Europe: Pre-1913
- N76 Economic History: Transport, Trade, Energy, Technology, and Other Services: Latin America; Caribbean
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O19 International Linkages to Development; Role of International Organizations
- R12 Size and Spatial Distributions of Regional Economic Activity