I am incredibly grateful for all the guidance I received during this process from my supervisors, @dennisnovy.bsky.social and Marta Santamaria, as well as from all the amazing people at @warwickecon.bsky.social.

Thank you!

Thank you!

My wonderful co-authors are: Enrico Cristoforoni, Marco Errico and Federico Rodari!

Curious to know more? Read the full paper here: edoardotolva.github.io/files/edoard...

Feel free to reach out with questions—thanks for reading! 🌍✈️🚢

Policy takeaway: Transport mode substitution impacts both economic welfare and the environment. Policymakers must design strategies that balance economic efficiency with environmental sustainability. 8/9

Substitution is not always beneficial⁉️

Relying on carbon-intensive air transport to offset rising sea costs can increase emissions, undermining the effectiveness of policies targeting maritime trade. 7/9

Even when transport costs rise globally, the impact can vary:

🛫 Developed countries are more exposed to higher air transport costs.
🚢 Low- and middle-income countries suffer more from maritime shocks. 6/9

Substitution reduces welfare losses from Russian airspace closure by ~4% compared to a no-substitution case.

This underscores the importance of having viable transport alternatives. 5/9

I tackle this in two steps:

1️) I Estimate the elasticity of substitution between transport modes, leveraging Russia’s airspace closure.

2️) I Combine this estimate with a Ricardian model that accounts for multiple transport modes, substitution, and endogenous costs to simulate policy scenarios. 4/9

Key questions:

1️) How do shocks to specific transport modes influence international trade?

2️) How crucial is substitution between transport modes for welfare?
3/9

Disruptions in transport are becoming more frequent, deeply affecting global trade flows‼️

Quoting @unctad.bsky.social’s latest Review of Maritime Transport: “Global maritime chokepoints are under pressure, exposing the vulnerability of supply chains.” 2/9