Trade costs between cities

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Ed Glaeser is pretty blasé about some intranational trade costs in this paragraph:

The national high-speed rail agenda is being pushed with claims that these trains will jump-start economic growth. No serious evidence supports such claims. When new transportation does affect local economies, it generally does so by moving activity from one place to another, not by creating nationwide benefits.

Better intercity transit shifts economic activity with no gains from economic reorganization? That’s not what economists usually expect from falling trade costs. Professor Glaeser is an expert on economic geography and urban economics, so there’s probably some research or theory behind that claim – I wish he wrote link-filled blog posts rather than Boston Globe columns.

Hat tip: Avent.

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One Response to “Trade costs between cities”

  1. Jim Says:

    Considering that one of Glaeser’s favourite examples from his own research is of how the Eerie Canal transformed the growth prospects of both Chicago and New York (and by opening up world markets to the export of Midwest grain, really did affect national growth), I really have no idea what he means by that paragraph.

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