Fajgelbaum, Pablo D.; Schaal, Edouard - In: Econometrica 88 (2020) 4, pp. 1411-1452
We study optimal transport networks in spatial equilibrium. We develop a framework consisting of a neoclassical trade model with labor mobility in which locations are arranged on a graph. Goods must be shipped through linked locations, and transport costs depend on congestion and on the...