Journal Article

Infrastructure and social welfare in metropolitan America


Abstract: Public infrastructure investment may indirectly affect firm productivity and household welfare through its impact on the location of economic activity. Existing infrastructure policies encourage firms and households to move from dense urban environments to the surrounding suburbs. Nevertheless, several recent studies have suggested that the concentration of producers and consumers within cities results in \"agglomeration economies\" that are socially beneficial. In light of these findings, the author recommends the creation of infrastructure investment authorities that would have the power to select and finance projects that promote the overall well-being of a given region. Such authorities would most likely direct a larger share of infrastructure investment to the central cities.

Keywords: Industrial location; Infrastructure (Economics); Investments; Public welfare;

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Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Economic Policy Review

Issue: Dec

Pages: 1-16

Order Number: v.7 no.3