Show Context Citation Context In the present panel context, there are four main issues to take into consideration: The Value of School Facility Investments: Evidence from a Dynamic Regression Discontinuity Design.
Infrastructure investment has been and will continue to be a prominent campaign theme in the run up to the US elections. Both Hillary Clinton and Donald Trump have promised significant public investment in infrastructure.
For some time, the discussion has revolved around the opportunities and costs of increased government infrastructure spending. September 19, Topic: He calls for the adoption of a major infrastructure investment program by Congress in springwhatever the election result.
Some infrastructure priorities can clearly be considered a responsibility of the private sector, and there is also a case for experimenting with the mobilisation of private capital for infrastructure that has traditionally been a public-sector preserve.
However, the reality that government borrowing costs are much lower than the returns demanded by private-sector infrastructure investors should lead to caution. Only when private-sector performance in building and operating infrastructure is likely to be better than what the public sector can do is there a compelling argument for privatisation.
Nevertheless, Summers admits that scepticism about the efficiency of infrastructure investment is legitimate. Ed Glaeser has an essay in the City Journal, which takes a more sceptical tone.
First, that it supercharges economic growth. Second, that infrastructure spending is an ideal government tool for fighting unemployment during recessions. Third, that infrastructure should also be a national responsibility, led by Washington and financed by federal tax revenues.
Glaeser thinks that none of this is correct. As for fighting recessions, which require a rapid response, it is hard to get infrastructure projects under way quickly and wisely enough. Moreover, centralised federal tax funding of these projects makes inefficiencies and waste even more likely.
Infrastructure advocates downplay standard cost-benefit analysis in favor of broad macroeconomic surveys, which look at the statistical link between public-infrastructure investment and overall economic activity. But Glaeser argues that this approach can produce imprecise—and even wildly misleading—results.
America needs an infrastructure renaissance, but it will not get it by the federal government simply writing big checks. Glaeser thinks a far better and fairer model would be for infrastructure to be managed by independent but focused local public and private entities and funded primarily by user fees, not federal tax dollars.
The infrastructure in the worst condition is infrastructure that is heavily subsidised, because politicians would rather build new projects than maintain old ones. That suggests that the US government should spend less, not more, on new infrastructure.
Making infrastructure spending a priority would simply lead to more grandiose projects, few of which will produce any economic or social returns.
Should the impetus lie with the private or the public sector? Noah Smith is against deliberately underestimating the upside of fixing roads and bridges. Infrastructure investments have elements of public goods, and this is something that the private sector, left to its own devices, cannot or will not provide enough of.
First, government can solve the coordination problem involved in building roads. Second, private companies may find it difficult to reap the full economic benefit from building roads, if the level of congestion is low.
Finally, transportation networks and other infrastructure allow businesses to cluster together, which produces agglomeration externalities. The US should work on eliminating the source of excess costs, whether these come from burdensome regulation, costly land acquisition, inefficient environmental review processes, inflated union wages or a combination thereof.
But if it waits until the costs decline, the cost of maintenance from a crumbling infrastructure could rise enough to cancel out much of whatever cost savings can be made by improving the system.
Smith sees the possibility of a demand gap as adding upside, but not much downside, to infrastructure spending. He argues that if there happens to be a lingering demand shortage, infrastructure spending would yield an added benefit. Cowen also declared that he favours more infrastructure spending, provided it is done wisely.
There is a good supply-side case for that, but there also seems to be a tendency to present it as a free lunch, which it is not.
Cowen had argued in a previous post that the opportunity cost of additional government borrowing is not zero, even if government borrowing rates were literally zero.
Delong argues that Summers is making a case that is intellectually irresistible for the first only, but the cases for the second and third are intellectually irresistible as well.
In return for more spending, Clinton could have offered serious structural reforms: Such a package would have been irresistible.An Economic Analysis of Infrastructure Investment I. Introduction infrastructure. Next, we review evidence on supply-side factors, including the availability of infrastructure investment on industries that a priori .
AN ECONOMIC ANALYSIS OF TRANSPORTATION INFRASTRUCTURE INVESTMENT The Council of Economic Advisers “Infrastructure Investment: A Review Essay,” Journal of Economic Literature, 32(3) (September ): – 5 Less road congestion AN ECONOMIC ANALYSIS OF TRANSPORTATION INFRASTRUCTURE INVESTMENT.
"Infrastructure endowment and investment as determinants of regional growth in the European Union," EIB Papers 8/, European Investment Bank, Economics Department. Crescenzi, Riccardo & Rodríguez-Pose, Andrés, Tourism Infrastructure And Tourism Development Tourism Essay. Print () proposed that, the review of the literature provides the background and it should establish the need for the research and indicate that the writer is knowledgeable about the area.
there has been little research undertaken on the detailed relationships between. 9 Gramlich, Edward, “Infrastructure Investment: A Review Essay,” Journal of Economic Literature, Vol.
32, No. 3 (), pp. 10 Water infrastructure is local primarily because these are utilities that have local water and sewer rate bases.
Response Paper #1 In his paper, “Infrastructure Investment: A Review Essay,” Edward Gramlich1 offers an overview and critique of the literature on investment in public infrastructure, much of which had been generated during what he termed a “speculative.