Working Paper: CEPR ID: DP14193
Authors: Inga Heiland; Andreas Moxnes; Karen Helene Ulltveit Moe; Yuan Zi
Abstract: This paper examines the structure of the shipping network and itsimplications on global trade and welfare. Using novel data on the movementsof container ships, we calculate optimal travel routes. We thenestimate the impact of a shock to the network on global trade by meansof a natural experiment: the 2016 Panama Canal expansion. Tradebetween country pairs using the canal increased by 9-10% after theexpansion. While the building costs were borne by Panama alone, amodel-based quantification shows that the welfare gains were shared bymany countries, due to the network structure of shipping.
Keywords: shipping networks; trade
JEL Codes: F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| trade between country pairs utilizing the canal (F10) | increase in world real income (F62) |
| Panama Canal expansion (F69) | trade between country pairs utilizing the canal (F10) |
| trade between country pairs utilizing the canal (F10) | trade dynamics for global trade (F19) |