Spatial Closeness of Population and Economic Growth

We look at the spatial angle of economic growth. Specifically, we assess whether areas where people live closer together experience faster growth. Traditional measures like population density or urbanization are not optimal, as they are affected by large uninhabited areas or capped, respectively. We thus introduce a new measure Spatial Population Concentration (SPC) that captures how many people live on average within a given radius of every person within a geographic area. This measure allows for a more accurate measurement of the population concentration than traditional measures, as it does not share some of their shortcomings. Next, we show for U.S. counties that areas with a high spatial population concentration experience faster growth. We nd that counties with a low value of SPC measure in 1990 experienced substantially lower GDP growth over the next 25 years.