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The Role of Public Sector Investment for Economic Development in Emerging Countries: The Case of Lao PDR

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Abstract

Recently, the Lao PDR has achieved high economic growth at around 7-8 percent annually which is very stable and robust growth in Asian economic dynamics, in particular in ASEAN. Vital public investments play an important role to develop social infrastructures and then strengthen the supply-side economy. This paper analyzes the macroeconomic structure and causes of high economic growth of Lao PDR by utilizing a macroeconometric model. According to the econometric analysis, vital public sector investment behaviors have caused to strengthen the supply-side economy and exports, which resulted in foreign capital and public investment increases through its virtuous circle.

Suggested Citation

  • Osamu Nakamura, 2014. "The Role of Public Sector Investment for Economic Development in Emerging Countries: The Case of Lao PDR," Working Papers EMS_2014_12, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2014_12
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    File URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2014_12.pdf
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    References listed on IDEAS

    as
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    2. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    3. A. P. Thirlwall, 2002. "The Nature of Economic Growth," Books, Edward Elgar Publishing, number 2579.
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    More about this item

    Keywords

    public sector investment; take-off stage; macroeconometric model; scenario simulation; co-integrating relationships;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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