Rémi Jedwab, Jason M. Barr, Jan K. Brueckner, 28 February 2021

Housing prices in many countries are growing faster than incomes. Much of this affordability problem can be explained by regulatory barriers to new construction. This column calculates countries’ ‘building-height gaps’ – the difference between the total height of a country’s stock of tall buildings and what the total height would have been if building height regulations were relatively less stringent, based on parameters from a benchmark set of countries. These gaps are larger for richer countries and for residential buildings rather than for commercial buildings, and they correlate strongly with housing prices, sprawl, congestion, and pollution. 

Taylor Jaworski, Carl Kitchens, Sergey Nigai, 01 November 2020

The interaction between domestic transportation networks, market integration, and globalisation is important for understanding the value of domestic infrastructure investment and weighing these against the substantial costs of building and maintaining domestic roads. Using an endogenous specification of domestic and international trade costs that takes into account the availability of the road network and congestion levels, this column estimates that the total value of the entire US highway system was $619 billion in 2012 dollars, which accounts for 3.9% of US aggregate GDP in 2012. The results suggest that decisions on how much to invest in domestic infrastructure should be made in conjunction with considering how improvements in the domestic transportation networks would affect domestic and international trade as well as distributional consequences for different locations within a country.

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