Thursday, August 28, 2014

Do Big Infrastructure Projects Boost GDP?

Do Big Infrastructure Projects Boost GDP? This question is addressed in a study done by the IMF. Here is a key excerpt:

"The econometric evidence reveals small positive and instantaneous associations between public investment booms and economic growth, but little long run impact. Several aspects of the evidence cast doubt on the idea that past booms triggered or accelerated GDP growth. Most of the positive association occurs immediately; a spending boom tends to be immediately associated with a rise in GDP this year, but not subsequent years."

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