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Optimal Road Network and the Gains from Intranational Trade

Author

Listed:
  • Lucas Dias

    (Departamento de Economia, Universidade de São Paulo)

  • Eduardo Haddad

    (Departamento de Economia, Universidade de São Paulo)

  • Andrés Maggi

    (Harvard University)

Abstract

This paper assesses the efficiency of the Brazilian road network using data on road speeds and distances and a spatial general equilibrium model with costly trade. We find that Brazil would gain 0.31% of welfare if better organize its road network for intranational trade and that the most populated regions are relatively oversupplied of transport infrastructure compared with the remote and poor areas. We further find long lasting effects of the highways’ project designed to integrate Brasília with the rest of the country in the 1960s. Regions connected by the so-called Radial Highways are currently oversupplied of transport infrastructure.

Suggested Citation

  • Lucas Dias & Eduardo Haddad & Andrés Maggi, 2020. "Optimal Road Network and the Gains from Intranational Trade," TD NEREUS 15-2020, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    • Handle: RePEc:ris:nereus:2020_015
    as

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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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