Simon Fuchs and Woan Foong Wong
Working Paper 2022-13a
October 2022 (Revised October 2024)
Abstract:
We examine the economic and environmental impacts of improvements and disruptions in multimodal transport networks. Our quantitative spatial equilibrium model incorporates routing over multiple modes and congestion at intermodal terminals. We estimate a modal substitution elasticity with highway and rail data and a terminal congestion elasticity with vessel-positioning data. Calibrated to the US freight network, our model identifies key bottlenecks and quantifies $300 million–$700 million in additional real GDP gains from intermodal terminal improvements. These gains are 2.5 times higher without congestion, and substitution away from roads yields additional environmental benefits. Losing rail network access, factoring in modal substitution and general equilibrium effects, is estimated to reduce real GDP by $230 billion.
JEL classification: F11, R12, R42
Key words: multimodal transport, transport network, spatial equilibrium, endogenous transport costs, infrastructure investments, disruptions, bottlenecks
https://doi.org/10.29338/wp2022-13
Simon Fuchs is with the Federal Reserve Bank of Atlanta. Woan Foong Wong is with the University of Oregon and CEPR. The authors are grateful to the NBER, DOT, and NSF for project support under the “Economics of Transportation in the 21st Century” Initiative. They thank Treb Allen, Adina Ardelean, Costas Arkolakis, Bruce Blonigen, Matilde Bombardini, Mark Colas, Arnaud Costinot, Doireann Fitzgerald, Cecile Gaubert, David Hummels, Samuel Kortum, Nelson Lind, Yuhei Miyauchi, Andrii Parkhomenko, Joseph Shapiro, Hugo E. Silva, Conor Walsh, and seminar participants at UC Berkeley Haas School of Business, Emory University, Kiel Institute, Minneapolis Federal Reserve Bank, National University of Singapore, Purdue University, UBC Sauder School of Business, and the University of Stavanger, as well as participants at the NBER Spring 2023 Conference on Economics of Transportation, 1st Annual World Bank Conference on Transport Economics, ADB Urban Infrastructure conference, ASSA 2023, BFI Junior Spatial conference, CESifo Global Economy Conference, CRED Workshop on Urban and Regional Economics 2024, EIIT Conference (UC San Diego), Midwest International Trade Conference (GA Tech), Ron Jones Workshop (Rochester University), SMU-Jinan Conference on Urban and Regional Economics 2022, SED 2023, International Trade and Macro Workshop (St Louis Federal Reserve Bank), Trade Mini-Conference (UCLA), UEA, West Coast Trade Workshop (UC Davis), and West Coast Spatial Workshop (UC Berkeley) for very helpful comments. Benjamin Delgado and Philip Economides provided excellent research assistance. The views expressed here are those of the author and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the author's responsibility.
Please address questions regarding content to Simon Fuchs, Federal Reserve Bank of Atlanta, 1000 Peachtree Street NE, Atlanta, GA 30309, or Woan Foong Wong, University of Oregon.
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