A Perfect Storm: First-Nature Geography and Economic Development

Abstract

First-nature geography shapes the location of prosperity. I provide evidence by investigating the effects when it suddenly changes. In 1825 a storm breached the Agger Isthmus. This connected Denmark's west Limfjord Region to the North Sea. I demonstrate that trade followed. Prosperity relocated with it: population rose 27.0 percent within a generation - an elasticity of 1.6 relative to market access - with occupational shifts toward fishing and manufacturing. Fertility, not migration, drove the expansion. A mirror experiment, the waterway's closure circa 1086-1208, caused symmetric declines in medieval coin and building finds.