US cities and productivity in the railroad era

There is increasing evidence that cities offer externalities that raise labour productivity. A column in Vox by Professor Nicholas Crafts from the University of Warwick and the School’s Dr Alex Klein looks at the contribution of US cities to productivity growth at the turn of last century. The findings show that increased specialisation, promoted by improved transportation, was the key to productivity growth. Today’s policymakers should heed this lesson. You can read the complete Vox article here.

The Vox piece was mentioned by Paul Krugman in his New York Times blog on 31 July. Click here to read his comments in full.