Economic Geography Aspects of the Panama Canal

46 Pages Posted: 30 Jul 2019

See all articles by Stephan Maurer

Stephan Maurer

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Ferdinand Rauch

University of Oxford

Date Written: June 2019

Abstract

This paper studies how the opening of the Panama Canal in 1914 changed market access and influenced the economic geography of the United States. We compute shipment distances with and without the canal from each US county to each other US county and to key international ports and compute the resulting change in market access. We relate this change to population changes in 20-year intervals from 1880 to 2000. We find that a 1 percent increase in market access led to a total increase of population by around 6 percent. We compute similar elasticities for wages, land values and immigration from out of state. When we decompose the effect by industry, we find that tradable (manufacturing) industries react faster than non-tradable (services), with a fairly similar aggregate effect.

JEL Classification: F1, N72, O1, R1

Suggested Citation

Maurer, Stephan and Rauch, Ferdinand, Economic Geography Aspects of the Panama Canal (June 2019). CEPR Discussion Paper No. DP13820. Available at SSRN: https://ssrn.com/abstract=3428340

Stephan Maurer (Contact Author)

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

HOME PAGE: http://sites.google.com/site/stephanernstmaurer/

Ferdinand Rauch

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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