We examine the optimal financing of infrastructure when governments have limited financial commitment and can expropriate rents from private sector firms that manage infrastructure. While private firms need incentives to implement projects well, governments need incentives to limit...

How should industrial policies be directed to reduce distortions and foster economic development? We study this question in a multi-sector model with technology adoption, where the production of goods and modern technologies features rich network structures. We provide simple formulas for the...

This paper asks whether increasing productivity in the electricity sector can yield larger long-run GDP gains than suggested by electricity's small share of aggregate economic activity. We answer this question using a dynamic multi-sector model in which electricity is a strong complement to...

The Inca Empire was the last of a long series of highly developed cultures in pre-colonial South America. It stretched across parts of the current territories of Argentina, Bolivia, Chile, Colombia, Ecuador and the whole of Peru. The Inca Road was its 30,000-kilometer-long transportation system....

Transit infrastructure is a critical asset for economic activity yet costly to build in dense urban environments. We measure the benefit of the Second Avenue Subway extension in New York City by analyzing local real estate prices which capitalize the benefits of transit spillovers. We find that...

Cities are shaped by transportation infrastructure. Older cities were anchored by waterways. Nineteenth century cities followed the path of streetcars and subways. The 20th century city rebuilt itself around the car. The close connection between transportation and urban form is natural, since...

We investigate the impact of U.S. bombing on later economic development in Vietnam. The Vietnam War featured the most intense bombing campaign in military history and had massive humanitarian costs. We use a unique U.S. military dataset containing bombing intensity at the district level (N=584)....

Real and private-value assets--defined here as the sum of real estate, infrastructure, collectibles, and non-corporate business equity--is an investment class worth an estimated $85 trillion in the U.S. alone. Furthermore, private values can affect pricing in many other financial markets, such...

We examine the productivity of public infrastructure in a general equilibrium context. In our model, infrastructure lowers costs in a manufacturing sector characterized by both firm-level returns to scale and industry-level external returns to variety. Infrastructure alters factor prices,...

In this paper we examine the effects of publicly financed infrastructure and R&D capital on the cost structure and productivity performance of twelve two-digit U.S. manufacturing industries. A general framework is developed to measure contribution of demand, relative input prices, technical...