Faculty Scholarship 1994 - Present

Forecasting the Impact of the Asian Economic Crisis on U.S. Railroads

After many years of rapid economic growth, the Asian economies are experiencing a serious economic contraction. The purpose of this paper is to predict the impact of the Asian economic crisis on U.S. fright railroads. The crisis should have a negative impact in two ways -- by reducing the volume of height carried between the U.S. and Asia, and by reduing the volume of freight carried on the "land bridge" between Asia and Europe, which passes through the U.S. While Eastern railroads can hope to emerge relatively unscathed from Asia's economic crisis, the railroad system as a whole can be expected to suffer a contraction that is about equal to about one quarter of its average annual growth rate. If the Asian economic crisis turns out to be worse than the International Monetary Fund expects, the U.S. freight railroad system will be lucky to maintainn its annual aggregate activity levels, let alone achieve any increases in activity, until the Asian economic crisis passes.