Railroads

From the outset, railroads excited the public’s imagination, leading to extravagant claims regarding their contribution to economic growth and development that only grew with time. Skepticism about these claims eventually led to their debunking, most notably by Robert Fogel whose seminal work was also central to the emergence of cliometrics and inspired the first major controversy in the discipline. The flood of work that followed paints a more nuanced picture, generally assigning a larger growth and development role to the railroad than Fogel, but one far short of the hyperbole of past generations. Railroads were important to the economy and transformative in their effect but not decisive. By lowering transport costs – especially after adjusting for quality – they not only diverted trade but also created new opportunities in part by generating positive externalities that promoted scale and agglomeration economies with network spillovers continent-wide.