Investing More Could Boost US Economy for Generations
The paper looks at different models to understand how the U.S. economy has grown over time. It then calculates the benefits of increasing investment in terms of future output. The results show that the U.S. economy's long-term growth aligns with the neoclassical growth model, which emphasizes the role of capital in growth. Other models that suggest a bigger impact of capital on growth and long-term effects of investment do not seem to match the data.