Beyond Keynesianism: Global Infrastructure Investments In Times Of Crisis

Concerns have been raised that the "new normal" — a period of high unemployment, low returns on investment, high risks, and low growth — may become protracted in advanced economies. The world, therefore, needs a growth-lifting strategy. This strategy could take the form of a global infrastructure investment initiative that goes beyond the borders of advanced countries. Economic returns to infrastructure investments are high in developing countries, which have become important drivers of global growth. At the same time, infrastructure investments require capital goods, most of which are produced in high-income countries. Scaling up infrastructure investment in developing countries could, therefore, help generate a virtuous cycle in support of a global recovery.