ABSTRACT
This chapter explores the significance of international trade for rail shipments. It demonstrates how advances in the spatial economics literature can be used to infer changes in the demand of shipment services among US counties following any change in local or global economic conditions. The chapter presents some basic facts about international integration, and shows evidence on the significance of international transactions for the demand of internal shipments by rail. It provides a non-technical way advances in quantitative spatial economics that allow an answer to the class of questions, and it illustrates a possible application quantitatively. The chapter describes the degree to which economies have become more integrated over time. It looks at the relation between spatial integration and demand for transportation services in general, and rail services in particular.
