Advanced Search
MyIDEAS: Login

Structural Breaks in Public Infrastructure Investment in the U.S

Contents:

Author Info

  • Alfredo M. Pereira

    ()
    (Department of Economics, College of William and Mary)

  • Martin B. Schmidt

    ()
    (Department of Economics, College of William and Mary)

Abstract

This paper investigates the possible existence and timing of structural breaks in public infrastructure investment in the US. Results are obtained using both the conventional Chow tests as well as the multivariate Bai, Lumsdaine and Stock tests which are more appropriate for finding breaks in the context of a VAR structure. All tests consider aggregate public investment as well as nine different disaggregated categories of public investment. In addition, multivariate tests include private output, employment, and investment, the variables usually considered in the literature. Empirical results suggest that a break in the mean of public investment occurred in the late 1970s or early 1980s. This is true at the aggregate level as well as for most types of public infrastructures. The measurement of the economic effects of public investment is a critical piece of information to understand the effects of any fiscal stimulus package. The empirical evidence in the literature is somewhat inconclusive at least partially because structural breaks have been largely ignored. We regard the evidence presented in this paper as the first step in the process of revisiting the analysis of the effects of such investments in a VAR framework while accounting for the presence of structural breaks.

Download Info

If 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.
File URL: http://economics.wm.edu/wp/cwm_wp55rev.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 55.

as in new window
Length: 10 pages
Date of creation: 24 Aug 2007
Date of revision:
Handle: RePEc:cwm:wpaper:55

Contact details of provider:
Postal: P.O. Box 8795, Williamsburg, VA 23187-8795
Phone: (757) 221-4311
Fax: (757) 221-2390
Web page: http://www.wm.edu/economics/
More information through EDIRC

Related research

Keywords: public investment; infrastructure; structural breaks; VAR modeling;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Donald W.K. Andrews, 1990. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Cowles Foundation Discussion Papers 943, Cowles Foundation for Research in Economics, Yale University.
  2. 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.
  3. Bai, Jushan & Lumsdaine, Robin L & Stock, James H, 1998. "Testing for and Dating Common Breaks in Multivariate Time Series," Review of Economic Studies, Wiley Blackwell, vol. 65(3), pages 395-432, July.
  4. BAI, Jushan & PERRON, Pierre, 1998. "Computation and Analysis of Multiple Structural-Change Models," Cahiers de recherche 9807, Universite de Montreal, Departement de sciences economiques.
  5. Serena Ng & Timothy J. Vogelsang, 1997. "Analysis of Vector Autoregressions in the Presence of Shifts in Mean," Boston College Working Papers in Economics 379, Boston College Department of Economics.
  6. Alfredo Pereira & Jorge Andraz, 2004. "Public highway spending and state spillovers in the USA," Applied Economics Letters, Taylor & Francis Journals, vol. 11(12), pages 785-788.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Alfredo M. Pereira & Jorge M. Andraz, 2008. "On the Regional Incidence of Public Investment in Highways in the USA," Working Papers 70, Department of Economics, College of William and Mary, revised 15 Sep 2010.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cwm:wpaper:55. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daifeng He) or (Alfredo Pereira).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.