Over at EconBrowser, James talks about Geography and Income. He talks about the question of how much economic activity is dependent on geographic location. When you look at a map of GDP density – GDP per square kilometre – it’s fairly obvious that the bulk of economic activity in densely populated areas which are near coastal regions.
This map is from a paper by John Gallup, Jeffrey Sachs and Andrew Mellinger in the International Regional Science Review (1999), as linked to from EconBrowser.
Look at how densely an economic region Europe is, with lots of crinkly coastline to aid incoming cargo ships. Obviously one of the primary factors to economic activity is geographic location. What will be interesting is to see how much this changes with technology changes in the future. Will geography be such an important factor in the future?