High-speed rail and the spatial economy

High-speed rail (HSR) is expanding rapidly worldwide. This review identifies three defining features of HSR: its strong appeal to high-value business travelers, the presence of long-haul economies whereby costs per kilometer decline with distance, and its capacity to enable intercity commuting between cities. These characteristics lead to non-trivial implications for the spatial economy. While HSR infrastructure is costly, travel-time savings and induced economic spatial reallocation can be substantial. We review both cost–benefit analyzes and empirical evidence, and argue that general equilibrium effects are central to understanding the full economic impact of HSR. • HSR mainly serves high-value business trips, intensifying face-to-face ties. • HSR is subject to long-haul economies, which means that marginal cost per kilometre falls with trip length. • HSR may foster inter-city commuting implying migration of high-skilled to medium-sized cities. • Conventional CBA ignores first-order general-equilibrium effects. • HSR typically widens spatial disparities—intermediate towns often lose jobs to large cities.