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How Does Public Investment Affect Economic Growth in HIPC? An Empirical Assessment

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  • Marianna Belloc

    ()

  • Pietro Vertova

    ()

Abstract

A better assessment of the impact of public investment on economic performance is crucial in order to design and implement effective fiscal policies for adjustment with growth in highly indebted poor countries. In this paper we investigate empirically the relationship between public investment, private investment and output, providing a dynamic econometric procedure on a selected group of Highly Indebted Poor Countries (HIPCs). Our results provide empirical support for both the crowding-in hypothesis and a positive effect of public investment on output.

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 416.

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Date of creation: Jan 2004
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Handle: RePEc:usi:wpaper:416

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Keywords: Fiscal adjustment; public investment; crowding-in; Highly Indebted Poor Countries (HIPCs).;

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Cited by:
  1. Agenor, Pierre-Richard & Nabli, Mustapha K. & Yousef, Tarik M., 2005. "Public infrastructure and private investment in the Middle East and North Africa," Policy Research Working Paper Series 3661, The World Bank.
  2. Yongzheng Yang & Robert Powell & Sanjeev Gupta, 2005. "The Macroeconomic Challenges of Scaling Up Aid to Africa," IMF Working Papers 05/179, International Monetary Fund.
  3. Pinto Moreira, Emmanuel & Bayraktar, Nihal, 2005. "A macroeconomic framework for quantifying growth and poverty reduction strategies in Niger," Policy Research Working Paper Series 3506, The World Bank.

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