The relationship among railway networks, energy consumption, and real added value in Italy. Evidence form ARDL and Wavelet Analysis

Existing studies reveal opposing results regarding the economic growth and infrastructure nexus, which emanates from the differences in scale, timing and stage of development. In this paper, we explore the relationship between railway networks and real GDP controlling for energy consumption, over the period 1861–1970 in Italy. The empirical strategy uses both AutoRegressive Distributed Lags (ARDL) model and the Wavelet Analysis (WA), which is able to adopt to scale and time support, thereby enabling one to escape the Heisenberg's curse. Our applied findings show that the two series are generally positive correlated (being in phase), but also that railway networks cause real value added in the long-run. Thus, through an innovative approach, we can confirm previous results in literature: in fact, railway networks represent a determinant of economic growth in the Italian case.