Rural Infrastructure and Agricultural Market Integration in the United States: A long run perspective
In recent years, there has been an increasing focus by policymakers on rural infrastructure in the United States, including most recently tax credits to encourage investment. Previous work has documented the importance of railroad expansion for nineteenth century development, and demonstrated that policy failure led to the disintegration of agricultural markets in the interwar period, with potentially serious macroeconomic consequences. Using a database of average prices by state of seven agricultural products for the period ca. 1870-2010, we extend this analysis to the postSecond World War period. We find a striking disintegration in recent decades, as measured by price dispersion, which we attribute to decades of underinvestment, particularly in railroads. We thus provide strong support for the present policy focus on investment in rural infrastructure.
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- Giovanni Federico & Paul Sharp, 2013.
"The cost of railroad regulation: the disintegration of American agricultural markets in the interwar period,"
Economic History Review,
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- Federico, Giovanni & Sharp, Paul, 2012. "The cost of railroad regulation: The disintegration of American Agricultural Markets in the interwar period," Discussion Papers of Business and Economics 20/2012, Department of Business and Economics, University of Southern Denmark.
- Giovanni Federico & Paul Sharp, 2011. "The Cost of Railroad Regulation: The Disintegration of American Agricultural Markets in the Interwar Period," Discussion Papers 11-17, University of Copenhagen. Department of Economics.
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- Mario J. Crucini & Mototsugu Shintani & Takayuki Tsuruga, 2009. "The Law of One Price Without the Border: The Role of Distance Versus Sticky Prices," NBER Working Papers 14835, National Bureau of Economic Research, Inc.
- Uebele, Martin, 2011. "National and international market integration in the 19th century: Evidence from comovement," Explorations in Economic History, Elsevier, vol. 48(2), pages 226-242, April.
- Sharp, Paul & Weisdorf, Jacob, 2013. "Globalization revisited: Market integration and the wheat trade between North America and Britain from the eighteenth century," Explorations in Economic History, Elsevier, vol. 50(1), pages 88-98.
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