 The Welfare Effects of Transportation Infrastructure ImprovementsTreb Allen and Costas Arkolakis No 212, 2019 Meeting Papers from Society for Economic Dynamics Abstract: We develop a general equilibrium geographic framework to characterize the welfare effect of transportation infrastructure investments. We tackle three distinct but conflating challenges: First, we offer an analytical characterization of the routing problem and, in particular, how infrastructure investment between any two connected locations decreases the total trade costs between all pairs of locations. Second, we characterize how this cost reduction affects welfare within a standard general equilibrium geography setup where market inefficiencies arise due to agglomeration and dispersion spillovers. Finally, we show how our framework admits analytical characterizations of traffic congestion, which creates a critical --albeit tractable--feedback loop between trade costs and the general equilibrium economic system. We apply these results to calculate the welfare eects of improving each of the thousands of segments of the U.S. national highway network. We nd large but heterogeneous welfare eects with the largest gains concentrated in metropolitan areas and along important trading corridors Date: 2019 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:212 Access Statistics for this paper More papers in 2019 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC. |
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