The Impact of Transportation Infrastructure on the Colombian Economy
AbstractThis paper measures some of the impacts that development in transportation infrastructure could have on the Colombian economy during the period 1905-1990. The first section of the paper analyzes the responsiveness of the economy to changes in transportation costs and changes in transportation length network, by estimating the demand elasticities for railroadsâ freight and passenger services. This enables us to calculate the social savings on railroad freight. The lack of data on highwaysâ transportation rates and freight volumes narrows the analysis to the railway sector alone. The second section studies the correlation between coffee expansions and transportation infrastructure improvements. The hypothesis is that improvements in transportation have been trigged by, and subsequently have contributed to, the expansion of coffee exports during the first half of the twentieth century. To test this hypothesis a time series technique, vector auto-regression (VAR) estimation, is implemented. The last section examines whether declines in transportation costs, due to expansions in transportation infrastructure, can explain reductions in the divergences of the agricultural prices gap among Colombian cities. The study of this issue relies on cointegration analysis. Our main result is that railroads did not play an overwhelming role in the Colombian economy. The main problem was the topographical conditions of the country that made railroad constructions very costly, the lack of economic resources, and the not competing forces of alternative transport modes. The results suggest that even highways did not help draw the country together.
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Bibliographic InfoPaper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 124.
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Other versions of this item:
- María Teresa Ramírez, 1999. "The Impact Of Transportation Infraestructure On The Colombian Economy," BORRADORES DE ECONOMIA 003600, BANCO DE LA REPÚBLICA.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-02 (All new papers)
- NEP-COM-2003-04-02 (Industrial Competition)
- NEP-MAC-2003-04-02 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- María Teresa Ramírez & Hadi Salehi Esfahani, .
"Infrastructure and Economic Growth,"
Borradores de Economia
123, Banco de la Republica de Colombia.
- Fogel, Robert William, 1979. "Notes on the Social Saving Controversy," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 39(01), pages 1-54, March.
RePEc Biblio mentionsAs found on the RePEc Biblio, the curated bibliography for Economics:
- > Economic History > Regional Economic History > Latin American Economic History > Economic History of Colombia
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