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Is government spending on roads and railways a good idea?

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Is government spending on roads and railways a good idea?

BBC news asked some experts to ponder the vital question: is this a sure-fire way to boost the economy, or can it be a waste of money?

Professor Nicholas Crafts, Warwick University

Nick Crafts is a professor of economic history, and he thinks that the results of spending on economic infrastructure have been a mixed bag.

Some projects, like the Channel Tunnel, have been extremely expensive compared with their benefits.

And he says there are obvious question marks about the benefits of HS2, the planned new rail link between London, Birmingham and the north of England.

Short term spending may pump money into the economy and then be re-spent, but Prof Crafts thinks this benefit can be overstated.

So what about improving the economic capacity of the economy, long term?

"It is possible to work out roughly what the right level of public spending is to sustain the growth of the economy and prevent bottlenecks," he says.

"Before the banking crisis the right number was about 2.5% of GDP spent on public capital each year and since then we have been spending about 1.5% of GDP.

"But since the crisis, the economy has not grown very much, so the question that is unresolved is whether there is a "new normal" in which the economy will never grow more than quite slowly - if so, the economy will not need so much public capital," he explains.

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