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BPEA Article

Capital Formation and Economic Policy


THE CURRENT DISCUSSION of capital formation in the United States reflects
a general belief that investment has been inadequate during the 1970s
and that this shortfall explains a large part of the current economic
difficulties. The productivity slowdown, in particular, is often blamed
on the failure of investment to keep the capital stock growing as fast as
the number of workers.



Lawrence H. Summers

Charles W. Eliot University Professor and President Emeritus - Harvard University

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