PUBLIC CAPITAL FORMATION AND THE GROWTH OF REGIONAL MANUFACTURING INDUSTRIES

Abstract

Our purpose in this paper is to provide new estimates of the link between public infrastructure and economic performance by extending and updating our earlier work on regional manufacturing productivity. Our findings suggest that this link is weak. Productivity actually grew slightly faster in the older, declining regions of the country during the period 1951-1986. In contrast, the public capital stock grew substantially faster in the Sun Belt. 1978-1986 is of particular interest; the public capital stock grew much more quickly and productivity grew much more slowly in the Sun Belt as compared to the Snow Belt during that period.