The Linkage Between Transportation Infrastructure Investment and Productivity: A U.S. Federal Research Perspective

Recent studies suggest that diminished investment in the quality and quantity of public infrastructure induced the decline in U.S. output growth rates and output per hour (productivity) growth rates. Over the years, during various downturns in the economy, many explanations have been offered for such slowdowns. However, even the best known economists conclude that the sources remain a mystery. While research on this linkage began some years ago, recent national level studies directed attention to the productive effects of public capital and highway infrastructure. In 1989, in light of the post-Interstate era and an increasingly constrained financial environment, the Federal Highway Administration (FHWA) began to reexamine this hypothesis and its implications for national investment through a research agenda on the interrelationship between transportation infrastructure investment and productivity. In this research the FHWA hopes to act as an intelligent consumer of the research findings, while at the same time acting as a program manager, serving to stimulate rigorous research on the issue.