While the price of equipment has declined in recent decades, the cost of structures is rising in the U.S. and other high-income economies. 📈
In a new column for VoxEU @ CEPR, Professor Munseob Lee examines this countervailing trend and what it means for policy: https://ow.ly/Ca1Y50Z6VjB
The steady decline in the relative price of equipment has long been seen as a primary engine of long-run growth. This column documents a quieter, countervailing trend. In the US and other high-income economies, the relative price of structures has been rising for half a century. It now offsets a substantial share of the gains from cheaper equipment. The proximate driver is weak productivity growth in construction itself.
