Transportation Supply and Economic Growth in a Multiregional System

This paper is directed to the problem of evaluating the development role of freight transportation in a dynamic multiregional input - output model. Under realistic structures of the technological, trade, and capital matrices, conditions for the existence of a balanced growth solution are given. Optimal investment policies in transportation network are also discussed. The corresponding problem of adding a minimum (weighted) set of transportation links to the graph associated with the model, so as to satisfy feasible connectivity conditions, is then formulated in mathematical programming terms. Upper and lower bounds on the number of links to be added are also set.