On the Effects of Public Investment on Private Investment: What Crowds in What?
AbstractThis article provides an empirical investigation of the effects of public investment on the evolution of private investment in the United States. It is based on the impulse response analysis associated with vector auto-regressive (VAR) estimates. The empirical results suggest that at the aggregate level, public investment crowds in private investment. Disaggregating private investment shows that the crowding-in effect of public investment is strong for equipment and only marginal for structures. This crowding-in effect on private equipment is particularly strong in the cases of industrial equipment and transportation equipment. In fact, public investment marginally crowds out private investment in information equipment. A final look at the effects of different types of public investment on the different types of private investment suggests that in about one third of the cases, public investment variables crowd out private sector variables. More important, the aggregate results often hide a wide diversity of effects.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by in its journal Public Finance Review.
Volume (Year): 29 (2001)
Issue (Month): 1 (January)
Contact details of provider:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Marianna Belloc & Pietro Vertova, 2004. "How Does Public Investment Affect Economic Growth in HIPC? An Empirical Assessment," Department of Economics University of Siena 416, Department of Economics, University of Siena.
- Torrisi, Gianpiero, 2009. "Public infrastructure: definition, classification and measurement issues," MPRA Paper 12990, University Library of Munich, Germany.
- Christophe Kamps, 2004.
"The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries,"
Kiel Working Papers
1224, Kiel Institute for the World Economy.
- Christophe Kamps, 2005. "The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries," International Tax and Public Finance, Springer, vol. 12(4), pages 533-558, August.
- Stephen P. A. Brown & Kathy J. Hayes & Lori L. Taylor, 2002.
"State and local policy, factor markets and regional growth,"
0202, Federal Reserve Bank of Dallas.
- Brown, Stephen P. A. & Hayes, Kathy J. & Taylor, Lori L., 2003. "State and Local Policy, Factor Markets, and Regional Growth," The Review of Regional Studies, Southern Regional Science Association, vol. 33(1), pages 40-60.
- Muyambiri, Brian & Chiwira, Oscar & Enowbi Batuo, Michael & Chiranga, Ngonidzashe, 2010. "The Causal Relationship between Private and Public Investment in Zimbabwe," MPRA Paper 26671, University Library of Munich, Germany.
- Ward Romp & Jakob de Haan, 2007.
"Public Capital and Economic Growth: A Critical Survey,"
Perspektiven der Wirtschaftspolitik,
Verein für Socialpolitik, vol. 8(s1), pages 6-52, 04.
- Romp, Ward & de Haan, Jakob, 2005. "Public capital and economic growth: a critical survey," EIB Papers 2/2005, European Investment Bank, Economics Department.
- Torrisi, Gianpiero, 2009.
"Infrastructures and economic performance: a critical comparison across four approaches,"
18688, University Library of Munich, Germany.
- Gianpiero Torrisi, 2010. "Infrastructures and Economic Performance: A Critical Comparison Across Four Approaches," Theoretical and Practical Research in Economic Fields, ASERS Publishing, vol. 0(1), pages 86-96, June.
- Yang Zou, 2006. "Empirical studies on the relationship between public and private investment and GDP growth," Applied Economics, Taylor & Francis Journals, vol. 38(11), pages 1259-1270.
- Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2012. "The Macroeconomic Impact of Infrastructures: A Literature Review and Empirical Analysis on the Case of Italy," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
- A Badawi, 2003.
"Private Capital Formation and Public Investment in Sudan: Testing the Substitutability and Complementarity Hypotheses in a Growth Framework,"
The School of Economics Discussion Paper Series
0316, Economics, The University of Manchester.
- Ahmed Badawi, 2003. "Private capital formation and public investment in Sudan: testing the substitutability and complementarity hypotheses in a growth framework," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(6), pages 783-799.
- repec:rom:campco:v:7:y:2011:i:1:p:356-364 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).
If references are entirely missing, you can add them using this form.