Lawrence Summers evaluates various arguments in support of policy measures to stimulate investment and then presents empirical evidence on the response of investment to an assortment of tax changes. He concludes that policies to encourage investment will result in only a small increase in the rate of economic growth over the next decade, that tax policies to stimulate investment are unlikely to moderate inflation, and that fears of insufficient capital accumulation as a source of unemployment are groundless. However, despite his pessimism about increased economic growth or reduced inflation via tax policies designed to stimulate investment, Summers concludes that tax rate reductions may substantially reduce the deadweight loss associated with capital income taxation and substantially improve economic welfare.