Is there a lack of public capital in the European Union?
AbstractThis paper investigates whether there is a lack of public capital in European Union countries. The analysis builds on a new database providing internationally comparable capital stock estimates for 22 OECD countries, among these 14 EU countries, for the period 1960-2001. A simple model of endogenous growth is used in order to highlight the inherently nonlinear relationship between public capital and economic growth and to derive a measure of the growth-maximising public capital stock. Against this background, the empirical analysis provides estimates of the growth-maximising level of public capital for EU countries. The empirical results suggest that there currently is no lack of public capital in most "old" EU countries.
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Bibliographic InfoPaper provided by European Investment Bank, Economics Department in its series EIB Papers with number 3/2005.
Length: 22 pages
Date of creation: 06 Jun 2005
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public capital; economic growth;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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