Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Policy Watch: Infrastructure Investment and Economic Growth
Journal of Economic Perspectives
vol. 6,
no. 4, Fall 1992
(pp. 189–198)
(Complimentary)
Abstract
In the late 1980s, David Aschauer (1989) triggered a long overdue dialogue among economists and political leaders when he published a study arguing that much of the decline in U.S. productivity that occurred in the 1970s was precipitated by declining rates of public capital investment. My own work confirmed these results (Munnell, 1990a). Spending advocates seized on these findings as support for increased public investment. The enthusiasm among policymakers for the early Aschauer results was matched, if not surpassed, by skepticism on the part of many economists. Critics of these studies charged that the methodology was flawed, that the direction of causation between public investment and output growth is unclear and that, even if the historical empirical relationships were estimated correctly, they provide no clear indications for current policy. Who's right? What do we know and not know about the link between public infrastructure and productivity? And what are the implications of these results for policy?Citation
Munnell, Alicia H. 1992. "Policy Watch: Infrastructure Investment and Economic Growth." Journal of Economic Perspectives, 6 (4): 189–198. DOI: 10.1257/jep.6.4.189JEL Classification
- H54 National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
- E62 Fiscal Policy
There are no comments for this article.
Login to Comment