Urban productivity and factor growth in the late nineteenth century

Using the theoretical literature on aggregate growth as a foundation, this paper establishes the stylized empirical facts regarding U.S. urban growth in the 1880s. We estimate the covariation of empirical proxies for various theorized sources of growth with the growth rates in output, capital, and labor. Our results support Barro [Quarterly Journal of Economics, 106, 407-444 (1991)] and others who have found an important role for convergence and other neoclassical mechanisms. Importantly, we find that externality-based factors impact growth in inputs but have no direct relationship with productivity growth. (C) 1997 Academic Press