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High-speed rail spurs growth in German towns

Cologne/Frankfurt route

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With so much investment necessary to create a network of high-speed rail, there will be many policy makers looking at economic impacts, and a new study shows that economies can grow as they are connected to a high-speed line. Researchers from the London School of Economics and the University of Hamburg measured the economic impact of a high-speed rail on two small cities in Germany, according to an article posted at the London School of Economics web site

High-speed rail lines bring clear and significant economic benefits to the communities they serve, the first thorough statistical study of the subject has discovered. 

Economists discovered that towns connected to a new high-speed line saw their GDP rise by at least 2.7 per cent compared to neighbors not on the route. Their study also found that increased market access through high-speed rail has a direct correlation with a rise in GDP – for each one per cent increase in market access, there is a 0.25 per cent rise in GDP. 

The findings, from the London School of Economics and Political Science and the University of Hamburg, may be used to support arguments for high-speed networks which are already being planned in the UK, US and across the world. Until now, no one has demonstrated that high-speed rail brings clear economic gains along its routes. 

Authors Gabriel Ahlfeld and Arne Feddersen presented their findings at the conference of the German Economic Association. The paper, From Periphery to Core: economic adjustments to high-speed rail, also points to advantages in employment and GDP per capita for towns on the high-speed network. 

Their research focused on the line between Cologne [Köln] and Frankfurt [Frankfurt am Main], which opened in 2002 and runs trains at almost 185mph (300 kmh). The authors looked at the prosperity and growth of two towns with stations on the new line – Limburg [Limburg an der Lahn] and Montabaur – and compared them with more than 3,000 other municipalities in the surrounding regions. 

The new line brought Limburg and Montabaur within a 40-minute journey of both Cologne and Frankfurt. Over a four-year period, the researchers found that both towns and the area immediately around them saw their economies grow by at least 2.7 per cent more than their unconnected neighbours.

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