Public investment criteria and idle resources: A regional analysis

Abstract

IN THIS PAPER, THE REGIONAL DISTRIBUTION OF OCCUPATIONAL AND INDUSTRIAL DEMANDS IMPOSED ON THE ECONOMY BY PUBLIC WATER RESOURCE INVESTMENTS LOCATED IN ANY REGION IS ESTIMATED AND A BASIS FOR ADJUSTING THE MONEY COSTS OF PROJECT CONSTRUCTION IN PERIODS OR REGIONS OF LESS THAN FULL EMPLOYMENT IS DEVELOPED. THE CONCLUSION DRAWN IS THAT THERE IS NOW AN OPERATIONAL MODEL AND A COMPUTER PROGRAM BY WHICH TO RE-EVALUATE PROJECTS IN TERMS OF THEIR OPPORTUNITY COSTS WHEN REGIONAL OR NATIONAL UNEMPLOYMENT RATES DEPART FROM FRICTIONAL MINIMA. MOREOVER, TO AVOID BIASING PUBLIC EXPENDITURES IN THE DIRECTION OF A SINGLE PROGRAM, ALL PUBLIC INVESTMENTS (INCLUDING TAX CUTS) SHOULD BE SIMILARLY ANALYZED TO DETERMINE WHAT, IF ANY, DIFFERENCES EXIST AMONG THEM. THROUGH THE USE OF THIS MODEL, MORE DISCRIMINATING JUDGMENT CAN BE APPLIED TO PUBLIC INVESTMENT POLICY IN GENERAL AND ESPECIALLY PUBLIC INVESTMENT POLICY IN THE CHRONICALLY DEPRESSED, HIGH UNEMPLOYMENT, AND DECLINING AREAS OF THE NATION. /AUTHOR/