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Does Infrastructure Spending Boost the Economy?, No. 22-04

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Does Infrastructure Spending Boost the Economy?, No. 22-04

DATE: February 2022

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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.

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Karabarbounis, Marios and Federal Reserve Bank of Richmond. "Does Infrastructure Spending Boost the Economy?, No. 22-04," Economic Brief (February 2022). https://fraser.stlouisfed.org/title/6034/item/610874, accessed on December 7, 2022.

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