We present a theory of spatial development. A continuum of locations in a geographic area choose each period how much to innovate (if at all) in manufacturing and services. Locations can trade subject to transport costs and technology diffuses spatially across locations. The result is an...

Gibrat's law, the orthogonality of growth to initial levels, is considered a stylized fact of local population growth. But throughout U.S. history, local population growth has significantly deviated from orthogonality. In earlier periods smaller counties strongly converged whereas larger...