An Investment Target?
In an excellent article in today’s FT Martin Wolf lambastes the government’s approach to growth.
Wolf rightly notes the ‘frighteningly low level’ of investment as % of GDP, just 15% – down 2% from the ‘pitiful’ average of the past 30 years and identifies this as a major challenge for policy makers.
He argues that:
The government should have used – it still could use – the current exceptionally low costs of borrowing as an opportunity to promote a much enlarged programme of investment in infrastructure.
Again, I agree.
I’m wondering though – should the government announce an investment as a share of GDP target? Maybe 18% to begin with?
The government could then commit itself to increasing public investment to hit this target if private investment failed to materialise.