Swedish Freight Demand: Short, Medium, and Long-term Elasticities

This paper explores empirical linkages between cycles and trends in freight transportation activity and real economic activity in Sweden. It decomposes freight demand into short-term, medium-term, and long-term components, and analyses the differences and similarities of the three time horizons. The findings are that freight demand is coupled with GDP over the long term and that there are no signs of decoupling. Freight demand, furthermore, is highly volatile over the short to medium term and these fluctuations are largely an effect of temporary changes in imports and exports. © 2012 LSE and the University of Bath