About the speaker: here.

David Nagy will present the paper: "All aboard: The aggregate effects of port development".

This paper studies the distributional and aggregate economic effects of new port technologies developed in the second half of the 20th century. To isolate exogenous variation in a city’s suitability for adopting modern port technologies, we propose a novel measure of naturally endowed port depth. Using this measure, we show that new technologies have led to a significant reallocation of shipping activity from large to small cities. To understand this reallocation, we add endogenous port development to a standard quantitative model of cross-city trade. According to the model, the adoption of new port technologies leads to benefits (increasing market access) but is costly (requiring the extensive use of land), suggesting a reallocation of shipping activities towards cities with low land prices and thus net gains from new port technologies that are heterogeneous across cities. Shipping has a significant positive net effect on local economic activity in the data. However, the effect of shipping on economic activity turns strongly negative once we control for benefits to market access as guided by the model. This suggests that trade-induced development may place significant costs on scarce local resources, which need to be taken into account when evaluating the effects of trade.