Railroads and Economic Growth: A Trade Policy Approach

Fernando Pérez-Cervantes

No 2014-14, Working Papers from Banco de México

Abstract: What was the impact of railroads in the output of the United States during the 19th century and how can a New Trade model help answer this question? In order to respond I follow three steps. First, I construct a new digital railroad data set and pair it with geographic and topographic features of the U.S. territory to estimate travel times between every pair of U.S. counties for every year between 1840 and 1900. Second, I use these results, together with a Ricardian model of trade and U.S. county output data from the 19th century, to estimate county gains from trade using a fixed-point algorithm. Third, I estimate ounterfactuals with the railroads built up to a certain year. My estimates suggest that there was a lot of migration anticipating railroad construction and not the other way around. However, leaving all factors of production fixed, if the railroads were made suddenly unavailable in 1890 there would have been a 9.6% reduction in output, but in 1900, after the financial crisis, the impact would have been less than 9 %.

Keywords: Railroads; Trade; Gravity Models (search for similar items in EconPapers)
JEL-codes: F10 F14 N71 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-gro, nep-his and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://www.banxico.org.mx/publications-and-press/ ... -8A2A668D4FB8%7D.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdm:wpaper:2014-14

Access Statistics for this paper

More papers in Working Papers from Banco de México Contact information at EDIRC.
Bibliographic data for series maintained by Subgerencia de desarrollo de sistemas ().