Production versus Transportation Technologies: Theory and Evidence

56 Pages Posted: 22 Jun 2007 Last revised: 26 Feb 2015

Hakan Yilmazkuday

Florida International University (FIU) - Department of Economics

Date Written: April 2010

Abstract

The impacts of production and transportation technology changes are studied in a general-equilibrium trade model with an analytical solution where agents in each location produce different varieties of a common set of goods. Wages are equalized in nominal terms across locations, with differences in purchasing power offset by agents' preferences for particular locations in the initial steady-state. Instead of assuming iceberg costs, a transportation sector is modeled to allow an efficient distribution of workers across the production and transportation sectors. The counterfactuals have current and historical implications on the national, regional, and industrial variables of the U.S. economy.

Keywords: Technology, Trade, Intermediate Inputs, Transportation

JEL Classification: R12, R13, R32

Suggested Citation

Yilmazkuday, Hakan, Production versus Transportation Technologies: Theory and Evidence (April 2010). Available at SSRN: https://ssrn.com/abstract=995540 or http://dx.doi.org/10.2139/ssrn.995540

Hakan Yilmazkuday (Contact Author)

Florida International University (FIU) - Department of Economics ( email )

11200 SW 8th Street
Miami, FL 33199
United States

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