This paper provides new evidence of the macroeconomic effects of public investment in advanced economies. Using public investment forecast errors to identify the causal effect of government investment as well as model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public investment. When there is economic slack and monetary accommodation, demand effects are stronger, and the public-debt-to-GDP ratio may actually decline. Public investment is also more effective in boosting output in countries with higher public investment efficiency and when it is financed by issuing debt.

Abiad (adb), A., Furceri (imf And University Of Palermo), D., & Topalova (imf), P. (2016). The macroeconomic effects of public investment: Evidence from advanced economies. JOURNAL OF MACROECONOMICS, 50, 224-240 [10.1016/j.jmacro.2016.07.005].

The macroeconomic effects of public investment: Evidence from advanced economies

FURCERI, Davide
;
2016

Abstract

This paper provides new evidence of the macroeconomic effects of public investment in advanced economies. Using public investment forecast errors to identify the causal effect of government investment as well as model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public investment. When there is economic slack and monetary accommodation, demand effects are stronger, and the public-debt-to-GDP ratio may actually decline. Public investment is also more effective in boosting output in countries with higher public investment efficiency and when it is financed by issuing debt.
Abiad (adb), A., Furceri (imf And University Of Palermo), D., & Topalova (imf), P. (2016). The macroeconomic effects of public investment: Evidence from advanced economies. JOURNAL OF MACROECONOMICS, 50, 224-240 [10.1016/j.jmacro.2016.07.005].
File in questo prodotto:
File Dimensione Formato  
Jmacro 2015.pdf

Solo gestori archvio

Dimensione 1.47 MB
Formato Adobe PDF
1.47 MB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10447/243275
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 53
  • ???jsp.display-item.citation.isi??? 41
social impact