Finally, the consolidation of public finances was accompanied by a fall in public investment. Overall, cyclical factors feature prominently when trying to explain the low levels of investment over the last 10 to 15 years. Looking ahead, some of these effects can be expected to abate. Residential investment has gone up markedly in recent years, fuelled by pent-up housing demand and low interest rates.
Donald L Kohn: Managing risk in a changing economic and financial landscape Remarks by Mr Donald L Kohn, Member of the Board of Governors of the US Federal Reserve System, at the Banker’s Association for Finance and Trade and Institute of International Bankers Conference, New York, 15 June 2005.