Mobility Systems and Economic Growth: a Theoretical Analysis of the Long-Term Effects of Alternative Transportation Policies

Luigi Bonatti () and Emanuele Campiglio

No 907, Department of Economics Working Papers from Department of Economics, University of Trento, Italia

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 labor supply so as to afford larger expenditures in transportation. This has long-term welfare implications depending also on the negative externalities associated with transport.

Date: 2009
New Economics Papers: this item is included in nep-fdg
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