There exists a large branch of literature that employs changing political borders as natural experiments that allow to quantify the effect of market integration for the economy ranging from international trade to local housing markets. Another literature has argued that border changes are endogenous, tries to explain how the modern map has been drawn, and allows us to better understand history as well as economic growth. In this session, we will review this literature and analyze its major findings, common themes, and its methodology.

What determines our modern economic geography? The literature on long-run economic growth points at history, and highlights the role of former division lines between states (who may long have disappeared) and cultural differences (which are often neglected as economically irrelevant). In this talk, I will provide an overview of the recent literature on geographic borders, with a focus on the impact of the European Middle Ages and premodern era. I will highlight the role of political and informal institutions for the understanding of long-run economic development, especially inequality between areas, and the conditions and origins of structural change. The talk will contain hands-on information on how geographic information systems (GIS) can be used to take advantage of historical data, and how econometric methods such as border discontinuity designs can help us to establish causal inference.