Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Transportation Costs and International Trade in the Second Era of Globalization
Journal of Economic Perspectives
vol. 21,
no. 3, Summer 2007
(pp. 131–154)
(Complimentary)
Abstract
While the precise causes of postwar trade growth are not well understood, declines in transport costs top the lists of usual suspects. However, there is remarkably little systematic evidence documenting the decline. This paper brings to bear an eclectic mix of data in order to provide a detailed accounting of the time-series pattern of shipping costs. The ad-valorem impact of ocean shipping costs is not much lower today than in the 1950s, with technological advances largely trumped by adverse cost shocks. In contrast, air shipping costs have dropped an order of magnitude, and airborne trade has grown rapidly as a result. As a result, international trade has also experienced a significant rise in speed.Citation
Hummels, David. 2007. "Transportation Costs and International Trade in the Second Era of Globalization." Journal of Economic Perspectives, 21 (3): 131–154. DOI: 10.1257/jep.21.3.131JEL Classification
- F14 Empirical Studies of Trade
- L92 Railroads and Other Surface Transportation
- L93 Air Transportation
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