The Rise of the City
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The Rise of the City

Spatial Dynamics in the Urban Century

Edited by Karima Kourtit, Peter Nijkamp and Roger R. Stough

This book examines urban growth and the dynamics that are transforming the city and city regions in the 21st century focusing specifically on the spatial aspects of this process in the “Urban Century”. Forces that are driving city growth include agglomeration spillovers, concentration of innovation and entrepreneurship, diversity of information and knowledge resources, and better amenities and higher wages. These benefits produce a positive reinforcing system that attracts more people with new ideas and information, fuelling innovation, new products and services and more high-wage jobs, thereby attracting more people. Such growth also produces undesirable effects such as air and water pollution, poverty, congestion and crowding. These combined factors both impact and change the geography and spatial dynamics of the city. These transformations and the public policies that may be critical to the quality of life, both today and in the future, are the substance of this book.
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Chapter 9: Exploring surface transportation impact on economic output: a panel Granger causality test

Zhenhua Chen and Kingsley E. Haynes


Economic impact analysis of surface transportation infrastructure has long been an important task for policy makers and academic scholars. A valid knowledge of the linkage between surface transportation infrastructure and economic output not only helps researchers to achieve valid economic impact assessment, it also enables decision makers to develop the right infrastructure investment policies so as to generate greater economic benefits. In the past decades, literature on this topic has expanded exponentially since the milestone studies by Aschauer (1989, 1990, 1994), who found that public infrastructure has a strong positive impact on economic output. However, later studies found that actual impact is much less significant or even insignificant (Gramlich, 1994; Harmatuck, 1996; Nadiri and Mamuneas, 1996; Boarnet, 1997; Fernald, 1999; Boarnet and Haughwout, 2000; Gramlich, 2001). One of the major arguments that question the validity of these studies indicates that many studies are conducted without specifying the causal relationship (identification problem) between infrastructure and economic output (Gramlich, 1994; Kessides, 1993). On the one hand, surface transportation infrastructure enhances connections of regional transportation networks, which subsequently facilitates both freight and passenger movements by reducing the generalized transportation cost.

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