14 september 2011, build them and it might come

Nick clegg (5 february 2011), who I had the pleasure of debating with at close quarters a few months ago, tried to make a landmark speech this morning, on the theme of the moment, growth. Henry overmans was not impressed, being rather sniffy about the value of one of the main drivers the deputy prime minister identified, infrastructure. In fact, the literature is rather more ambivalent, or even supportive, provided of course its the right infrastructure, in the right place, which tends very much towards where an economy is growing already and where there is potential for more. Aschauer, gramlich, the british treasury, lau and munnell may all argue about the exact quantification of the multiplier effects of infrastructure investment, but it is clear that in the right circumstances, the effect is a positive one, with significant returns and increased output. It's an important point, as there does seem rather little a little place can do in the face of the current economic squalls, but building for the long-term does evidently seem something.