| This thesis revisits the controversial "Infrastructure Hypothesis" which attributes as much as 60% of the post-1973 productivity slowdown in the G-7 countries to a declining commitment to public investment, and to falling public capital-private capital stock ratios. The thesis contributes to the literature on the productive effects of core public investment--or infrastructure--by adopting physical indicators of infrastructure as the units of measurement, and by providing a sectoral analysis. Evidence of a positive contribution of infrastructure to economic growth, found in the form of a diminishing payoff to infrastructure investment with the passage of time (suggesting that infrastructure's importance was greater in the G-7 countries at earlier stages of economic development) was tenuous, and was not robust after the resolution of various econometric modelling problems. |
