Transport Infrastructure Investment: Implications for Growth and Productivity

Posted: 8 Dec 2009

See all articles by Nicholas Crafts

Nicholas Crafts

University of Warwick; Centre for Economic Policy Research (CEPR)

Date Written: Autumn 2009

Abstract

Theory and evidence on the effects of public investment on growth and productivity are reviewed. It is concluded that, on average, public capital has positive impacts on output and private investment, partly offset by the effects of the taxation needed to finance it. A possible future shortfall in public capital in the UK is highlighted. The paper also reviews the contribution of transport infrastructure to productivity and considers implications for cost-benefit analysis. It is suggested that there is a case for greater UK investment in roads but, ideally, this should be implemented along with an efficient national road-pricing scheme.

Keywords: economic growth, public capital, road pricing, transport infrastructure, wider economic benefits, H54, O49, R41

Suggested Citation

Crafts, Nicholas, Transport Infrastructure Investment: Implications for Growth and Productivity (Autumn 2009). Oxford Review of Economic Policy, Vol. 25, Issue 3, pp. 327-343, 2009, Available at SSRN: https://ssrn.com/abstract=1518816 or http://dx.doi.org/grp021

Nicholas Crafts (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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