WIFO White Paper: Macroeconomic Aspects of Transport Infrastructure Investments

Austria is well endowed with a well-developed transport infrastructure. Nevertheless, regularly occurring congestion in the urban areas and transit routes during vacation periods and inadequate transport links to its eastern neighbours make it necessary to further expand the country's road and rail network. Investment in transport infrastructure frequently is used as a measure to stimulate the economy. Such investment, however, is subject to the law of diminishing returns: the more capital-intensive it becomes the lower will be its effects on employment.