Is there a link between public investment and potential growth?

The Biden administration wants to launch a large infrastructure investment plan worth USD 2.3 trillion over 10 years , covering roads, bridges, electric vehicle subsidies, ports, airports (USD 620 billion in total), water, the electricity network, telecoms (USD 110 billion in total), renovation of buildings, schools, childcare centres (USD 210 billion). This plan also includes an increase in healthcare spending and spending on the elderly (USD 400 billion in total), support for industry and reshoring (USD 300 billion) and spending on R&D (USD 110 billion) and vocational training (USD 100 billion). The aim is obviously to lift the United States’ potential growth. A key question is then whether investing in infrastructure really does increase potential growth. To find out, we look at the correlation across OECD countries between productivity gains and the employment rate on the one hand and , on the other : Public investment; Healthcare spending (public and total); R&D spending (private and total); Labour force skills; The weight of industry in the economy. We find that productivity gains and the employment rate are: Positively correlated with (public and total) spending on healthcare and R&D and with labour force skills; Not correlated with the level of public investment or the weight of industry in GDP. It therefore seems that support for healthcare, research and training is effective, whereas support for infrastructure or industry is not.