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Highways And Globalization

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  • Taylor Jaworski
  • Carl Kitchens
  • Sergey Nigai

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.

Suggested Citation

  • Taylor Jaworski & Carl Kitchens & Sergey Nigai, 2023. "Highways And Globalization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(4), pages 1615-1648, November.
    • Handle: RePEc:wly:iecrev:v:64:y:2023:i:4:p:1615-1648
    DOI: 10.1111/iere.12640
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    References listed on IDEAS

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    1. Taylor Jaworski & Carl T. Kitchens, 2019. "National Policy for Regional Development: Historical Evidence from Appalachian Highways," The Review of Economics and Statistics, MIT Press, vol. 101(5), pages 777-790, December.
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    Cited by:

    1. Nehiba, Cody & Tyndall, Justin, 2023. "Highways and pedestrian deaths in US neighborhoods," Regional Science and Urban Economics, Elsevier, vol. 102(C).
    2. Brian C. Fujiy, 2024. "The Geography of Inventors and Local Knowledge Spillovers in R&D," Working Papers 24-59, Center for Economic Studies, U.S. Census Bureau.
    3. Barde, Sylvain & Klein, Alexander, 2021. "Transportation Costs in the Age of Highways: Evidence from United States 1955-2010," CAGE Online Working Paper Series 597, Competitive Advantage in the Global Economy (CAGE).
    4. Meng, Xuechen & Li, Jianfeng & Zhou, Xiaoying & Yao, Xiaoyang, 2024. "Transportation infrastructure, market access, and firms’ export competition: Evidence from China," Finance Research Letters, Elsevier, vol. 61(C).
    5. Ignatov, Augustin, 2024. "European highway networks, transportation costs, and regional income," Regional Science and Urban Economics, Elsevier, vol. 104(C).
    6. Calamunci, Francesca & Lonsky, Jakub, 2022. "Highway to Hell? Interstate Highway System and Crime," IZA Discussion Papers 15800, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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