How can transportation policies affect growth? A theoretical analysis of the long-term effects of alternative mobility systems

Luigi Bonatti and Emanuele Campiglio

Economic Modelling, 2013, vol. 31, issue C, 528-540

Abstract: We present an example of how public policies affect the evolution of the economy by influencing consumption habits, life styles and work attitudes. In particular, we show that governments can boost long-run growth by moving public investment away from collective transportation systems and towards infrastructures necessary for using private vehicles. Indeed, by augmenting the relative convenience of using private mobility systems, which are those more costly for the households, the government induces them to increase their labour supply so as to afford larger expenditures in transportation. This has long-term welfare implications depending also on the negative externalities associated with transport.

Keywords: Endogenous growth; Public investment; Consumption habits; Labour supply; Negative externalities (search for similar items in EconPapers)
JEL-codes: D62 H54 J22 L91 O40 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:31:y:2013:i:c:p:528-540

DOI: 10.1016/j.econmod.2012.12.014

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