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Cart or Horse: Transport and Economic Growth

  • Tim Leunig

This paper argues that transport is more cart than horse, in that transport improvements are not the most important driver of economic growth for most countries. Nevertheless there are circumstances in which transport is particularly important. Big transport breakthroughs – such as replacing walking with railways, or creating a highways network for the first time – do have big effects, but these are unlikely to be seen again in developed economies. Instead transport in developed economies is best seen as having a supporting role. If it is neglected, it can constrain growth, as congestion and unreliable transport systems can exact a heavy price. But as long as the transport system is “good enough”, the returns to greater transport investment will be relatively limited.

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File URL: http://dx.doi.org/10.1787/5kg9mq4ws027-en
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Paper provided by OECD Publishing in its series International Transport Forum Discussion Papers with number 2011/4.

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Date of creation: Apr 2011
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Handle: RePEc:oec:itfaab:2011/4-en
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  1. Leunig, Timothy, 2006. "Time is Money: A Re-Assessment of the Passenger Social Savings from Victorian British Railways," The Journal of Economic History, Cambridge University Press, vol. 66(03), pages 635-673, September.
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  7. Crafts, Nicholas & Mulatu, Abay, 2006. "How Did the Location of Industry Respond to Falling Transport Costs in Britain Before World War I?," The Journal of Economic History, Cambridge University Press, vol. 66(03), pages 575-607, September.
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  9. Nicholas Crafts & Abay Mulatu, 2005. "What explains the location of industry in Britain, 1871–1931?," Journal of Economic Geography, Oxford University Press, vol. 5(4), pages 499-518, August.
  10. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
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  12. Jacobs, Jane, 1969. "Strategies for Helping Cities," American Economic Review, American Economic Association, vol. 59(4), pages 652-56, Part I Se.
  13. N. F. R. Crafts & C. Knick Harley, 2002. "Precocious British Industrialization: A General Equilibrium Perspective," UWO Department of Economics Working Papers 200213, University of Western Ontario, Department of Economics.
  14. Philippe Aghion & Peter Howitt, 1997. "Endogenous Growth Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011662, December.
  15. Harald Badinger, 2005. "Growth Effects of Economic Integration: Evidence from the EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 50-78, April.
  16. Summerhill, William R., 2005. "Big Social Savings in a Small Laggard Economy: Railroad-Led Growth in Brazil," The Journal of Economic History, Cambridge University Press, vol. 65(01), pages 72-102, March.
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