Advanced Search
MyIDEAS: Login to save this paper or follow this series

Linking Public Capital to Economic Performance, Public Capital: The Missing Link Between Investment and Economic Growth

Contents:

Author Info

  • Sharon J. Erenburg
Registered author(s):

    Abstract

    Following up on findings by J. Bradford DeLong and Lawrence Summers that a robust statistical relationship exists between productivity and private sector investment in plant and equipment, Erenburg explores whether there is also a connection between economic growth and public spending. She argues that public investment in infrastructure stimulates private sector investment in plant and equipment. By providing empirical proof that public and private investment are complements in production, Erenburg supplies the missing link that explicitly ties public infrastructure to economic growth.

    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://www.levyinstitute.org/pubs/ppb14.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Levy Economics Institute in its series Economics Public Policy Brief Archive with number 14.

    as in new window
    Length:
    Date of creation:
    Date of revision:
    Handle: RePEc:lev:levppb:14

    Contact details of provider:
    Web page: http://www.levyinstitute.org

    Related research

    Keywords:

    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. J. Bradford De Long & Lawrence H. Summers, 1990. "Equipment Investment and Economic Growth," NBER Working Papers 3515, National Bureau of Economic Research, Inc.
    2. McMillin, W Douglas & Parker, Randall E, 1991. "Federal Debt, Tax-Adjusted q, and Macroeconomic Activity," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(1), pages 100-109, February.
    3. Lynde, Catherine, 1992. "Private profit and public capital," Journal of Macroeconomics, Elsevier, vol. 14(1), pages 125-142.
    4. Geary, Patrick T & Kennan, John, 1982. "The Employment-Real Wage Relationship: An International Study," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 854-71, August.
    5. Ratner, Jonathan B., 1983. "Government capital and the production function for U.S. private output," Economics Letters, Elsevier, vol. 13(2-3), pages 213-217.
    6. Feldstein, Martin, 1982. "Government deficits and aggregate demand," Journal of Monetary Economics, Elsevier, vol. 9(1), pages 1-20.
    7. Aschauer, David Alan & Greenwood, Jeremy, 1985. "Macroeconomic effects of fiscal policy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 23(1), pages 91-138, January.
    8. David Alan Aschauer, 1990. "Is Government Spending Stimulative?," Contemporary Economic Policy, Western Economic Association International, vol. 8(4), pages 30-46, October.
    9. Barro, Robert J, 1981. "Output Effects of Government Purchases," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1086-1121, December.
    10. John F. Helliwell, 1992. "International Growth Linkages: Evidence from Asia and the OECD," NBER Working Papers 4245, National Bureau of Economic Research, Inc.
    11. Abel, Andrew B & Blanchard, Olivier J, 1986. "The Present Value of Profits and Cyclical Movements in Investment," Econometrica, Econometric Society, vol. 54(2), pages 249-73, March.
    12. Robert B. Barsky & Gary Solon, 1989. "Real Wages Over The Business Cycle," NBER Working Papers 2888, National Bureau of Economic Research, Inc.
    13. Sargent, Thomas J, 1978. "Estimation of Dynamic Labor Demand Schedules under Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 1009-44, December.
    14. Merrick, John Jr., 1984. "The anticipated real interest rate, capital utilization and the cyclical pattern of real wages," Journal of Monetary Economics, Elsevier, vol. 13(1), pages 17-30, January.
    15. Lynde, Catherine & Richmond, James, 1992. "The Role of Public Capital in Production," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 37-44, February.
    16. repec:fth:harver:1487 is not listed on IDEAS
    17. David Aschauer, 1988. "Does public capital crowd out private capital?," Staff Memoranda 88-10, Federal Reserve Bank of Chicago.
    18. Buiter, Willem H., 1977. "`Crowding out' and the effectiveness of fiscal policy," Journal of Public Economics, Elsevier, vol. 7(3), pages 309-328, June.
    19. Tatom, John A, 1980. "The "Problem" of Procyclical Real Wages and Productivity," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 385-94, April.
    20. Modigliani, Franco & Sterling, Arlie, 1986. "Government Debt, Government Spending and Private Sector Behavior: Comment," American Economic Review, American Economic Association, vol. 76(5), pages 1168-79, December.
    21. Sumner, Scott & Silver, Stephen, 1989. "Real Wages, Employment, and the Phillips Curve," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 706-20, June.
    22. Alan Manning, 1992. "Wage Bargaining and the Phillips Curve: The Identification and Specification of Aggregate Wage Equations," CEP Discussion Papers dp0062, Centre for Economic Performance, LSE.
    23. Koray, Faik, 1987. "Government Debt, Economic Activity, and Transmission of Economic Disturbances," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(3), pages 361-75, August.
    24. Mishkin, Frederic S, 1982. "Does Anticipated Aggregate Demand Policy Matter? Further Econometric Results," American Economic Review, American Economic Association, vol. 72(4), pages 788-802, September.
    25. Nickell, S J, 1984. "A Review of Unemployment: Cause and Cure, by Patrick Minford with David Davies, Michael Peel and Alison Sprague," Economic Journal, Royal Economic Society, vol. 94(376), pages 946-53, December.
    26. Alicia H. Munnell, 1990. "How does public infrastructure affect regional economic performance?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 34, pages 69-112.
    27. Seater, John J, 1982. "Are Future Taxes Discounted?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(3), pages 376-89, August.
    28. Morrison, Catherine J & Schwartz, Amy Ellen, 1996. "State Infrastructure and Productive Performance," American Economic Review, American Economic Association, vol. 86(5), pages 1095-1111, December.
    29. Silber, William L, 1970. "Fiscal Policy in IS-LM Analysis: A Correction," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 2(4), pages 461-72, November.
    30. Steven M. Fazzari & R. Glenn Hubbard & BRUCE C. PETERSEN, 1988. "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
    31. Barry P. Bosworth & Robert M. Solow & Lawrence H. Summers, 1982. "Capital Formation and Economic Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 13(2), pages 273-326.
    32. Randall W. Eberts & Michael S. Fogerty, 1987. "Estimating the relationship between local, public and private investment," Working Paper 8703, Federal Reserve Bank of Cleveland.
    33. Otani, Ichiro, 1978. "Real Wages and Business Cycles Revisited," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 301-04, May.
    34. Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-89, August.
    35. Nadiri, M Ishaq & Mamuneas, Theofanis P, 1994. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 22-37, February.
    36. Barth, James R & Iden, George & Russek, Frank S, 1986. "Government Debt, Government Spending, and Private Sector Behavior: Comment," American Economic Review, American Economic Association, vol. 76(5), pages 1158-67, December.
    37. Shah, Anwar, 1992. "Dynamics of Public Infrastructure, Industrial Productivity and Profitability," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 28-36, February.
    38. Ciccolo, John & Fromm, Gary, 1980. "'q,' Corporate Investment, and Balance Sheet Behavior," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(2), pages 294-307, Special I.
    39. Kormendi, Roger C, 1983. "Government Debt, Government Spending, and Private Sector Behavior," American Economic Review, American Economic Association, vol. 73(5), pages 994-1010, December.
    40. Nelson, Richard R, 1973. "Recent Exercises in Growth Accounting: New Understanding or Dead End?," American Economic Review, American Economic Association, vol. 63(3), pages 462-68, June.
    41. Michael J. Boskin, 1987. "Concepts and Measures of Federal Deficits and Debt and Their Impact on Economic Activity," NBER Working Papers 2332, National Bureau of Economic Research, Inc.
    42. Randall W. Eberts, 1986. "Estimating the contribution of urban public infrastructure to regional growth," Working Paper 8610, Federal Reserve Bank of Cleveland.
    43. Minford, Patrick, 1984. "A Review of Unemployment: Cause and Cure, by Patrick Minford with David Davies, Michael Peel and Alison Sprague: Response," Economic Journal, Royal Economic Society, vol. 94(376), pages 954-59, December.
    44. Ahmed, Shaghil, 1986. "Temporary and permanent government spending in an open economy: Some evidence for the United Kingdom," Journal of Monetary Economics, Elsevier, vol. 17(2), pages 197-224, March.
    45. Shafik, Nemat & Shafik, Nemat, 1992. "Modeling private investment in Egypt," Journal of Development Economics, Elsevier, vol. 39(2), pages 263-277, October.
    46. Bernanke, Ben S, 1983. "The Determinants of Investment: Another Look," American Economic Review, American Economic Association, vol. 73(2), pages 71-75, May.
    47. Canzoneri, Matthew Buford, 1978. "The Returns to Labor and the Cyclical Behavior of Real Wages: The Canadian Case," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 19-24, February.
    48. Aschauer, David Alan, 1985. "Fiscal Policy and Aggregate Demand," American Economic Review, American Economic Association, vol. 75(1), pages 117-27, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    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:lev:levppb:14. 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: (Marie-Celeste Edwards).

    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.