Working Paper: CEPR ID: DP10038
Authors: Stephen J. Redding; Matthew A. Turner
Abstract: This paper surveys the theoretical and empirical literature on the relationship between the spatial distribution of economic activity and transportation costs. We develop a multi-region model of economic geography that we use to understand the general equilibrium implications of transportation infrastructure improvements within and between locations for wages, population, trade and industry composition. Guided by the predictions of this model, we review the empirical literature on the effects of transportation infrastructure improvements on economic development, paying particular attention to the use of exogenous sources of variation in the construction of transportation infrastructure. We examine evidence from different spatial scales, between and within cities. We outline a variety of areas for further research, including distinguishing reallocation from growth and dynamics.
Keywords: Highways; Market Access; Railroads; Transportation
JEL Codes: F15; R12; R40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Transportation infrastructure improvements (R42) | Market access (L17) |
| Transportation infrastructure improvements (R42) | Wages (J31) |
| Market access (L17) | Population distribution (D39) |
| Wages (J31) | Population distribution (D39) |
| Transportation infrastructure improvements (R42) | Population shifts from urban areas to suburban locales (R23) |
| Transportation infrastructure improvements (R42) | Land rents (R21) |
| Market access (L17) | Trade dynamics (F14) |