This paper examines the relationship between equipment investment and economic growth, using data from the United Nations Comparison Project and the Penn World Table. The authors find a strong association between machinery and equipment investment and GDP growth, with each percentage point of GDP invested in equipment associated with an increase in GDP growth of 0.3 percentage points per year. This relationship is stronger than those found between growth and other components of investment. The authors argue that this association is causal, suggesting that higher equipment investment drives faster economic growth. They estimate that the social return to equipment investment in well-functioning market economies is around 30% per year. The paper also explores various aspects of the relationship, including the timing of the association, the behavior of equipment prices, and the differential impact of equipment investment on intensive and extensive growth. The findings support the traditional view that equipment investment is a prime determinant of national productivity growth and challenge the notion that the private return to equipment investment reflects its true social product.This paper examines the relationship between equipment investment and economic growth, using data from the United Nations Comparison Project and the Penn World Table. The authors find a strong association between machinery and equipment investment and GDP growth, with each percentage point of GDP invested in equipment associated with an increase in GDP growth of 0.3 percentage points per year. This relationship is stronger than those found between growth and other components of investment. The authors argue that this association is causal, suggesting that higher equipment investment drives faster economic growth. They estimate that the social return to equipment investment in well-functioning market economies is around 30% per year. The paper also explores various aspects of the relationship, including the timing of the association, the behavior of equipment prices, and the differential impact of equipment investment on intensive and extensive growth. The findings support the traditional view that equipment investment is a prime determinant of national productivity growth and challenge the notion that the private return to equipment investment reflects its true social product.