Photo (cc) by waitscm
That’s according to Business Insider, citing a new research paper…
Sylvain Leduc and Daniel Wilson studied the effect of unexpected infrastructure grants on state GDPs (GSPs) since 1990 and found that, on average, each dollar of infrastructure spending increases the GSP by at least two dollars. Valerie Ramey, Professor of Economics at UC San Diego and member of the National Bureau of Economic Research, reports that the typical fiscal multiplier is between 0.5 and 1.5.
In other words, infrastructure spending is a better return on investment than most uses of taxpayer money. The study also says it’s even more effective during an economic downturn: up to $4 per $1 spent.