The macroeconomic effects of public investment: Evidence from advanced economies

Davide Furceri, Petia Topalova (Imf), Davide Furceri (Imf And University Of Palermo), Abdul Abiad (Adb)

Risultato della ricerca: Articlepeer review

35 Citazioni (Scopus)

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.
Lingua originaleEnglish
pagine (da-a)224-240
Numero di pagine17
RivistaJournal of Macroeconomics
Volume50
Stato di pubblicazionePublished - 2016

All Science Journal Classification (ASJC) codes

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