Optimal Transport Networks in Spatial Equilibrium - MATLAB Toolbox
MATLAB toolbox implementing the quantitative spatial economic model of:
Fajgelbaum, P. D., & Schaal, E. (2020). Optimal transport networks in spatial equilibrium. Econometrica, 88(4), 1411-1452.
The model/software uses duality principles to optimize over the space of networks, nesting an optimal flows problem and a neoclasical general-equilibrium trade model into a global network design problem to derive the optimal (welfare maximizing) transport network (extension) from any primitive set of economic fundamantals [population per location, productivity per location for each of N traded goods, endowment of a non-traded good, and (optionally) a pre-existing transport network]. For more information about the model see this folder and the User Guide.
The model is the first of its kind and a pathbreaking contribution towards the welfare maximizing planning of transport infrastructure. Its creation has been funded by the European Union through an ERC Research Grant. Community efforts to further improve the code are welcome.