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14 - Underlying Sources of Growth

First and Second Nature Geography

from Part II - Factors Governing Differential Outcomes in the Global Economy

Published online by Cambridge University Press:  03 June 2021

By
Paul Caruana-Galizia ,
Toshihiro Okubo  and
Nikolaus Wolf
Edited by
Stephen Broadberry  and
Kyoji Fukao
Stephen Broadberry
Affiliation:
University of Oxford
Kyoji Fukao
Affiliation:
Hitotsubashi University, Tokyo
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Summary

We provide evidence that both ‘first nature’ and ‘second nature’ geography matter for long-run growth. This is complemented with two new case studies on Japan and European regions over the entire twentieth century, which allow us to sharpen our focus on the role of geography, given that institutional and cultural differences within countries will be more limited than across countries. Both case studies suggest that second nature geography is essential. In the last decades, metropolitan regions around the capital cities grew faster, while others, including many former industrial regions, started to fall behind. On a global level, this is mirrored in an increasing role for market access. This evidence ties into Baldwin’s idea of the two ‘unbundlings’ of production since 1800.

Keywords

First naturesecond naturemarket accesscitiesunbundlingJapanEurope.
Type
Chapter
Information
The Cambridge Economic History of the Modern World , pp. 382 - 417
Publisher: Cambridge University Press
Print publication year: 2021

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