Looking For Multiple Equilibria In Russian Urban System

This paper studies the effect of forced labor relocation in GULAG, and the losses during the WWII on the long-term dynamics of city growth in the USSR. The main goal is to test whether the impact of Stalinist policies and the WWII on economic geography of the USSR persists in long run, and whether, in response to these policies, the long-term dynamics of the Soviet city growth shows evidence of multiple equilibria. I find that WWII does not have a statistically significant long-term effect on city growth, controlling for other factors, while GULAG system does. The growth of an average city in 1960s exhibits partial mean-reversion after the shocks of 1930s-1950s. The dynamics is consistent with multiple equilibria hypothesis: cities that received a lot of investment (as measured by the GULAG population) in the 1930s-1950s, have a higher chance not to revert to the previous trajectory, but to continue growing, while neglected cities are more likely to decline.