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A Perfect Storm: First-Nature Geography and Economic Development

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In 1825 a storm cut a new channel through Denmark’s Limfjord, providing an exogenous shock to first-nature geography. Difference-in-differences estimates show the channel raised trade immediately and, within a generation, lifted population by 26.7 percent — an elasticity of 1.6 relative to market access improvement. Higher fertility and shifts into fishing and manufacturing employment, not migration, drove the expansion. A mirror experiment—the waterway’s closure circa 1086-1208 — caused symmetric declines in medieval coin and building finds, bolstering external validity. These results offer robust causal evidence that first-nature geomorphology shapes the location of economic activity.

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This talk is part of the Quantitative History Seminar series.

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