Since 1960 the average annual growth rate of output per worker has been lower in the United States than in any other country in the so-called Group of Seven (G-7) industrialized economies--the United States, Japan, West Germany, Canada, France, Italy, and the United Kingdom. Accompanying this has been an 11-point drop in the U.S. share of total G-7 exports (from 33% to 22%). The U.S. balance of trade in goods and services has been negative since 1974. Also, since 1985, the U.S. has been a "debtor nation," owing more to foreigners than they owe to the U.S. Along nearly all dimensions, the U.S. has been losing competitive ground. This article examines the factors that might account for this competitiveness problem and what role the government might play in promoting international competitiveness. A potential "supply-side" avenue by which public policy may be able to exert influence on the process of economic expansion in the U.S is public investment in a basic infrastructure of roads, highways, mass transit, airports, port facilities, and similar structures. This would have two important effects on private sector production, productivity growth, and competitiveness. The first effect on private output growth arises from the availability of public capital to support private sector production; roads, highways, and airports allow the distribution of goods and services throughout national and international markets. The second effect of infrastructure spending on the economy arises from the complementarity between private and public capital in producing private sector goods and services; an increase in public sector capital will tend to raise the profitability of private plant and equipment and, over the space of several years, will tend to spur additional private investment.

  • Availability:
  • Corporate Authors:

    Associated General Contractors of America

    2300 Wilson Boulevard, Suite 400
    Arlington, VA  United States  22201
  • Authors:
    • Aschauer, D A
  • Publication Date: 1989-11

Media Info

  • Features: Figures; Photos;
  • Pagination: p. 16-19
  • Serial:
    • Constructor
    • Volume: 71
    • Issue Number: 11
    • Publisher: Associated General Contractors of America
    • ISSN: 0162-6191

Subject/Index Terms

Filing Info

  • Accession Number: 00490102
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 31 1989 12:00AM