Transportation Costs and the Spatial Organization of Economic Activity

59 Pages Posted: 23 Jun 2014 Last revised: 17 Apr 2022

Multiple version iconThere are 2 versions of this paper

Date Written: June 2014

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.

Suggested Citation

Redding, Stephen J. and Turner, Matthew A., Transportation Costs and the Spatial Organization of Economic Activity (June 2014). NBER Working Paper No. w20235, Available at SSRN: https://ssrn.com/abstract=2457710

Stephen J. Redding (Contact Author)

Princeton University ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://www.princeton.edu/~reddings/

Matthew A. Turner

University of Toronto ( email )

Department of Economics
150 St. George Street
Toronto, Ontario M5S 3G7
Canada

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