Over the span of a century, the American South experienced a significant rise in manufacturing productivity, gradually closing the economic gap with more industrialized regions of the United States. This prolonged period of growth reflects a broader trend of regional economic convergence, where less-developed areas improve their output efficiency and adopt advanced production techniques. The transformation was driven by infrastructure development, policy reforms, and increased investment in industrial capacity. By the late 20th century, the South had transitioned from an agrarian economy to a hub for manufacturing, benefiting from lower labor costs and strategic incentives to attract businesses. These shifts contributed to a more balanced national economic landscape, with productivity levels across states becoming increasingly aligned. The study highlights how institutional changes and market integration played pivotal roles in this evolution.
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How the US South caught up: A century of manufacturing productivity convergence CEPR