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Economic geography aspects of the Panama Canal

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  • Maurer, Stephan Ernst
  • Rauch, Ferdinand

Abstract

This paper studies how the opening of the Panama Canal in 1914 changed market access and influenced the economic geography of the United States. We compute shipment distances with and without the canal from each US county to each other US county and to key international ports and compute the resulting change in market access. We relate this change to population changes in 20-year intervals from 1880 to 2000. We find that a 1 percent increase in market access led to a total increase of population by around 6 percent. We compute similar elasticities for wages, land values and immigration from out of state. When we decompose the effect by industry, we find that tradable (manufacturing) industries react faster than non-tradable (services), with a fairly similar aggregate effect.

Suggested Citation

  • Maurer, Stephan Ernst & Rauch, Ferdinand, 2019. "Economic geography aspects of the Panama Canal," LSE Research Online Documents on Economics 103391, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:103391
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    File URL: http://eprints.lse.ac.uk/103391/
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    Cited by:

    1. Kerem Cosar & Benjamin Thomas, 2021. "The geopolitics of international trade in Southeast Asia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(1), pages 207-219, February.
    2. Brooks, Leah & Gendron-Carrier, Nicolas & Rua, Gisela, 2021. "The local impact of containerization," Journal of Urban Economics, Elsevier, vol. 126(C).
    3. Brandily, P. & Rauch, F., 2024. "Within‐city roads and urban growth," LSE Research Online Documents on Economics 122580, London School of Economics and Political Science, LSE Library.
    4. Jan David Bakker & Stephan Maurer & Jörn-Steffen Pischke & Ferdinand Rauch, 2021. "Of Mice and Merchants: Connectedness and the Location of Economic Activity in the Iron Age," The Review of Economics and Statistics, MIT Press, vol. 103(4), pages 652-665, October.
    5. Ulltveit-Moe, Karen Helene & Heiland, Inga & Moxnes, Andreas & Zi, Yuan, 2019. "Trade From Space: Shipping Networks and The Global Implications of Local Shocks," CEPR Discussion Papers 14193, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    market access; Panama Canal; trade shock; gravity;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-

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