HIGHWAYS AND GLOBALIZATION

Taylor Jaworski, Carl Kitchens and Sergey Nigai

International Economic Review, 2023, vol. 64, issue 4, 1615-1648

Abstract: This article quantifies the value of U.S. highways. We develop a multisector general equilibrium model with many locations in the United States (i.e., counties) and many countries. In the model, producers choose shipping routes subject to domestic and international trade costs, endogenous congestion, and port efficiency at international transshipment points. Applying the model, we find that removing the Interstate Highway System reduces real GDP by $421–$578 billion. The results highlight the gains from intersectoral and international trade as well as the role of domestic transportation infrastructure in shaping regional comparative advantage.

Date: 2023
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https://doi.org/10.1111/iere.12640

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Working Paper: Highways and Globalization (2020)
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