Infrastructure investment and economic growth

Article Abstract:

Cost-benefit analyses is necessary for making the optimal decision in infrastructure investment. Economists play an active role in providing information for policy making by analyzing the economic effectivity at the various levels of government. However, infrastructure investment policies should not be formulated on this analysis alone. For the investment to have the most benefit in economic output and growth, information must be realistically evaluated based on actual costs and benefits.

Author: Munnel, Alice H.
Analysis, Infrastructure (Economics), Economic policy

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Investment and hysteresis

Article Abstract:

A new approach to the theory of investment is discussed. The traditional theory pegs investment decisions to prices and long run average costs and assumes that a change in the variables would have an immediate effect on decisions. The theory falls short of real world observations. The sluggish response of firms to changes in prices and costs have not been considered in the theory. There is a need to update the theory by incorporating investment decision lags.

Author: Dixit, Avinash
Investments, Elasticity (Economics)

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Policy watch: designing an effective investment tax credit

Article Abstract:

An analysis of the investment tax credit (ITC) is presented. It is shown that the ITC provides firms the opportunity to decrease tax liabilities and implement a related reduction for capital acquisition cost. The tax credit may be implemented on a short-run or long-term basis. Temporary application yields investment stimulation while a more permanent approach positively affects capital formation, labor productivity and economic development.

Author: Meyer, Laurence, Prakken, Joel L., Varvares, Chris P.
Investment tax credit

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Subjects list: Evaluation, Research
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