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Cities, Regions and the Decline of Transport Costs

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Author Info
Edward L. Glaeser
Janet E. Kohlhase

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Abstract

The theoretical framework of urban and regional economics is built on transportation costs for manufactured goods. But over the twentieth century, the costs of moving these goods have declined by over 90% in real terms, and there is little reason to doubt that this decline will continue. Moreover, technological change has eliminated the importance of fixed infrastructure transport (rail and water) that played a critical role in creating natural urban centres. In this article, we document this decline and explore several simple implications of a world where it is essentially free to move goods, but expensive to move people. We find empirical support for these implications.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9886.

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Date of creation: Aug 2003
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Handle: RePEc:nbr:nberwo:9886

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Find related papers by JEL classification:
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R14 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Land Use Patterns

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  1. Marcy Burchfield & Henry G. Overman & Diego Puga & Matthew A. Turner, 2005. "Causes of sprawl: A portrait from space," Working Papers tecipa-192, University of Toronto, Department of Economics. [Downloadable!]
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  2. Eric Toulemonde, 2008. "Multinationals: Too Many or Too Few?— The Proximity–concentration Trade-off," Open Economies Review, Springer, vol. 19(2), pages 203-219, April. [Downloadable!] (restricted)
  3. Duranton, Gilles & Storper, Michael, 2005. "Rising Trade Costs? Agglomeration and Trade with Endogenous Transaction Costs," CEPR Discussion Papers 4933, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Thomas Gries & Tobias Heinrich, 2004. "Regional Growth and Development without Scale Effects – a Simple Model of Endogenous Formation of Regions," DEGIT Conference Papers c009_022, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  5. Edward L. Glaeser, 2005. "Urban Colossus: Why is New York America's Largest City?," NBER Working Papers 11398, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Hajime Takatsuka & Dao-Zhi Zeng, 2005. "Regional Specialization via Differences in Transport Costs," ERSA conference papers ersa05p448, European Regional Science Association. [Downloadable!]
  7. Carrere, Celine & Schiff, Maurice, 2004. "On the geography of trade : distance is alive and well," Policy Research Working Paper Series 3206, The World Bank. [Downloadable!]
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  8. Isacsson, Gunnar, 2005. "External effects of education on earnings: Swedish evidence using matched employee-establishment data," Working Paper Series 2005:10, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  9. Edward L. Glaeser, 2005. "Urban colossus: why is New York America's largest city?," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 7-24. [Downloadable!]
  10. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," Harvard Business School Working Papers 07-064, Harvard Business School. [Downloadable!]
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  11. Edward L. Glaeser, 2007. "Do Regional Economies Need Regional Coordination?," Levine's Bibliography 321307000000000917, UCLA Department of Economics. [Downloadable!]
  12. Edward L. Glaeser, 2003. "Reinventing Boston: 1640-2003," NBER Working Papers 10166, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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