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Mobility Systems and Economic Growth: a Theoretical Analysis of the Long-Term Effects of Alternative Transportation Policies

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  • Luigi Bonatti
  • Emanuele Campiglio

Abstract

We present an example of how public policies affect the evolution of the economy by influencing consumption habits, life styles and work attitudes. In particular, we show that governments can boost long-run growth by moving public investment away from collective transportation systems and towards infrastructures necessary for using private vehicles. Indeed, by augmenting the relative convenience of using private mobility systems, which are those more costly for the households, the government induces them to increase their labor supply so as to afford larger expenditures in transportation. This has long-term welfare implications depending also on the negative externalities associated with transport.

Suggested Citation

  • Luigi Bonatti & Emanuele Campiglio, 2009. "Mobility Systems and Economic Growth: a Theoretical Analysis of the Long-Term Effects of Alternative Transportation Policies," Department of Economics Working Papers 0907, Department of Economics, University of Trento, Italia.
    • Handle: RePEc:trn:utwpde:0907
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    1. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
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    Cited by:

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    2. Emanuele Campiglio, 2013. "The structural shift to green services," DEM Working Papers Series 033, University of Pavia, Department of Economics and Management.

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