Infrastructure in a Structural Model of Economic Growth

Douglas Holtz-Eakin and Amy Schwartz

No 4824, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Researchers, commentators, and politicians have devoted steadily more attention to infrastructure in response to claims that inadequate accumulation of public capital has contributed to substandard U.S. economic growth. Despite this, the link between infrastructure and productivity growth remains controversial. In this regard, it is somewhat surprising that infrastructure research has developed in isolation from the large literature on economic growth. We develop a neoclassical growth model that explicitly incorporates infrastructure and is designed to provide a tractable framework within which to analyze the empirical importance of public capital accumulation to productivity growth. We find little support for claims of a dramatic productivity boost from increased infrastructure outlays. In a specification designed to provide an upper bound for the influence of infrastructure, we estimate that raising the rate of infrastructure investment would have had a negligible impact on annual productivity growth between 1971 and 1986.

JEL-codes: E62 H54 (search for similar items in EconPapers)
Date: 1994-08
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

Published as Regional Science and Urban Economics, vol. 25, pp. 131-151, 1995

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Journal Article: Infrastructure in a structural model of economic growth (1995)
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