Roads to Prosperity? Assessing the Link Between Public Capital and Productivity
- 1 June 1999
- journal article
- Published by American Economic Association in American Economic Review
- Vol. 89 (3), 619-638
- https://doi.org/10.1257/aer.89.3.619
Abstract
Does the positive correlation between infrastructure and productivity reflect causation? If so, in which direction? I find that when growth in roads (the largest component of infrastructure) changes, productivity growth changes disproportionately in U.S. industries with more vehicles. That vehicle-intensive industries benefit more from road-building suggests that roads are productive. At the margin, however, road investments do not appear unusually productive. Intuitively, the interstate system was highly productive, but a second one would not be. Road-building thus explains much of the productivity slowdown through a one-time, unrepeatable productivity boost in the 1950's and 1960's. (JEL E62, O47, R53)Keywords
This publication has 6 references indexed in Scilit:
- A Simple Time Series Test of Endogenous vs. Exogenous Growth Models: An Application to the United StatesThe Review of Economics and Statistics, 1996
- Are apparent productive spillovers a figment of specification error?Journal of Monetary Economics, 1995
- Is public expenditure really productive?Economic Modelling, 1995
- The Effects of Public Infrastructure and R & D Capital on the Cost Structure and Performance of U.S. Manufacturing IndustriesThe Review of Economics and Statistics, 1994
- State-specific estimates of state and local government capitalRegional Science and Urban Economics, 1993
- Is public expenditure productive?Journal of Monetary Economics, 1989