Transportation & Infrastructure

— Jan 15, 2020
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Fiscal Policy and Recessions: The Role of Public Infrastructure Spending

Fiscal Policy and Recessions: The Role of Public Infrastructure Spending finds that infrastructure spending is not an effective policy for stimulating the economy during a recession because major infrastructure projects have very long timelines, and the recession will be over by the time shovels hit the ground. There is also evidence from the United States and Canada that increased federal spending on infrastructure merely replaces spending from lower levels of government, meaning the level of overall government spending remains the same.

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