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Economic geography aspects of the Panama Canal

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  • Stephan Maurer
  • Ferdinand Rauch

Abstract

This paper studies how the opening of the Panama Canal in 1914 changed counties’ market potential and influenced the economic geography of the USA. We compute shipment effective distances with and without the canal from each US county to each other US county and to international ports and compute the resulting change in market potential. The main elasticity would imply that a 1% increase in market potential led to a total increase of population by around 2.3% in 1940. We compute similar elasticities for wages, land values, and immigration from out of state. Tradable (manufacturing) industries react stronger than non-tradable (services) industries.

Suggested Citation

  • Stephan Maurer & Ferdinand Rauch, 2023. "Economic geography aspects of the Panama Canal," Oxford Economic Papers, Oxford University Press, vol. 75(1), pages 142-162.
    • Handle: RePEc:oup:oxecpp:v:75:y:2023:i:1:p:142-162.
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    File URL: http://hdl.handle.net/10.1093/oep/gpac009
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    Cited by:

    1. Brooks, Leah & Gendron-Carrier, Nicolas & Rua, Gisela, 2021. "The local impact of containerization," Journal of Urban Economics, Elsevier, vol. 126(C).
    2. Jan David Bakker & Stephan Maurer & Jörn-Steffen Pischke & Ferdinand Rauch, 2021. "Of Mice and Merchants: Connectedness and the Location of Economic Activity in the Iron Age," The Review of Economics and Statistics, MIT Press, vol. 103(4), pages 652-665, October.
    3. Kerem Cosar & Benjamin Thomas, 2021. "The geopolitics of international trade in Southeast Asia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(1), pages 207-219, February.
    4. Brandily, P. & Rauch, F., 2024. "Within‐city roads and urban growth," LSE Research Online Documents on Economics 122580, London School of Economics and Political Science, LSE Library.
    5. Ulltveit-Moe, Karen Helene & Heiland, Inga & Moxnes, Andreas & Zi, Yuan, 2019. "Trade From Space: Shipping Networks and The Global Implications of Local Shocks," CEPR Discussion Papers 14193, C.E.P.R. Discussion Papers.

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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-

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