Does Infrastructure Spending Boost the Economy?

Marios Karabarbounis

Richmond Fed Economic Brief, 2022, vol. 22, issue 04

Abstract: Public infrastructure investment is not like other government stimulus. Public investment acts as a typical demand stimulus but also provides important services to the private sector to assist with production of goods. This article analyzes the effects of public investment — especially highway construction, which is traditionally one of the largest components of public investment — on output. Dynamic effects turn out to be very important: Most studies find substantial benefits for the economy not in the immediate aftermath of the investment spending but a few years ahead.

Keywords: infrastructures; spending (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedreb:93815

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