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Freight Transportation Activity, Business Cycles and strongTrendstrong.pdf

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Freight Transportation Activity, Business Cycles and Trend Growth Fredrik N G Andersson and Thomas Elger Working Paper No. 2007:15 Department of Economics Lund University Freight Transportation Activity, Business Cycles and Trend Growth♣ Fredrik N G Andersson Department of Economics, Lund University * Thomas Elger Department of Economics, Lund University Abstract This paper studies empirical linkages between cycles and trends in freight trans- portation activity and real economic activity in Sweden. We find that cycles in freight transportation are highly contemporaneously correlated with cycles in economic variables over both the short run and the medium run. The pattern of long run growth in freight transportation activity coincides with growth in eco- nomic variables during long periods, but there are also periods with substantial differences. Furthermore, we observe and explain a large decline in trend growth in tonne-kilometres on road from the mid-nineties and onwards. JEL Codes: E29, C19, L92 Keywords: freight transportation, business cycles, trend growth, decoupling, efficiency ♣ Thomas Elger gratefully acknowledges funding from the Swedish Governmental Agency for Innovation Systems (VINNOVA); Project number 29035-1. Fredrik Andersson gratefully acknowledges funding from the Jan Wallander and Tom Hedelius foundation; Project number P2005-0117:1. The authors are thankful for comments by seminar participants at the Swedish Institute for Transport and Communications Analysis and Statistics Sweden (in particular Lars Werke). We also