IDEAS home Printed from https://ideas.repec.org/a/ags/ndjtrf/262666.html
   My bibliography  Save this article

Modeling the Transport Infrastructure-Growth Nexus in the United States

Author

Listed:
  • Chi, Junwook
  • Baek, Jungho

Abstract

The rising government funding in transport infrastructure has sparked political and academic debates on the economic impacts of transport infrastructure investment in the United States. Although numerous empirical studies have examined the transport infrastructure-growth nexus, existing literature has mixed conclusions of the economic effects of expanding transport infrastructure. The main objective of this paper is to assess the short- and long-run impacts of transport and nontransport public infrastructure on economic growth to provide an implication of the effectiveness of these fiscal policy tools in the short- and long-term. For this purpose, we employ a modern autoregressive distributed lag (ARDL) approach to explore the dynamic relationships among transport infrastructure, non-transport public infrastructure, private capital, labor hours, GDP, and exports. In the long run, we find that a bidirectional relationship exists between transport infrastructure and GDP, suggesting that expanding transport infrastructure improves aggregated economic output, and enhanced economic output increases public investment in transport infrastructure. However, the magnitude of the impact of transport infrastructure on GDP is smaller than that of non-transport public infrastructure, implying that non-transport infrastructure investment is a more effective longterm fiscal stimulus than expanding transport infrastructure.

Suggested Citation

  • Chi, Junwook & Baek, Jungho, 2016. "Modeling the Transport Infrastructure-Growth Nexus in the United States," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 55(3), December.
    • Handle: RePEc:ags:ndjtrf:262666
    DOI: 10.22004/ag.econ.262666
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/262666/files/Transport-Infrastructure-Growth-Nexus.pdf
    Download Restriction: no
    File URL: https://ageconsearch.umn.edu/record/262666/files/Transport-Infrastructure-Growth-Nexus.pdf?subformat=pdfa
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.262666?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
    2. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    3. Chandra, Amitabh & Thompson, Eric, 2000. "Does public infrastructure affect economic activity?: Evidence from the rural interstate highway system," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 457-490, July.
    4. Congressional Budget Office, 2014. "An Update to the Budget and Economic Outlook: 2014 to 2024," Reports 45653, Congressional Budget Office.
    5. Narayan, Paresh Kumar, 2004. "Do public investments crowd out private investments? Fresh evidence from Fiji," Journal of Policy Modeling, Elsevier, vol. 26(6), pages 747-753, September.
    6. Joseph Berechman & Dilruba Ozmen & Kaan Ozbay, 2006. "Empirical analysis of transportation investment and economic development at state, county and municipality levels," Transportation, Springer, vol. 33(6), pages 537-551, November.
    7. Congressional Budget Office, 2014. "The Budget and Economic Outlook: 2014 to 2024," Reports 45010, Congressional Budget Office.
    8. Garcia-Mila, Teresa & McGuire, Therese J., 1992. "The contribution of publicly provided inputs to states' economies," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 229-241, June.
    9. Bajo-Rubio, Oscar & Sosvilla-Rivero, Simon, 1993. "Does public capital affect private sector performance? : An analysis of the Spanish case, 1964-1988," Economic Modelling, Elsevier, vol. 10(3), pages 179-185, July.
    10. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    11. Johansen, Søren & Juselius, Katarina, 1992. "Testing structural hypotheses in a multivariate cointegration analysis of the PPP and the UIP for UK," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 211-244.
    12. Congressional Budget Office, 2014. "The Budget and Economic Outlook: 2014 to 2024," Reports 45010, Congressional Budget Office.
    13. Alicia H. Munnell, 1992. "Policy Watch: Infrastructure Investment and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 189-198, Fall.
    14. Pradhan, Rudra P. & Bagchi, Tapan P., 2013. "Effect of transportation infrastructure on economic growth in India: The VECM approach," Research in Transportation Economics, Elsevier, vol. 38(1), pages 139-148.
    15. Blonigen, Bruce A. & Cristea, Anca D., 2015. "Air service and urban growth: Evidence from a quasi-natural policy experiment," Journal of Urban Economics, Elsevier, vol. 86(C), pages 128-146.
    16. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    17. Alfredo Pereira & Jorge Andraz, 2012. "On the regional incidence of highway investments in the USA," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(3), pages 819-838, June.
    18. Ozbay, Kaan & Ozmen-Ertekin, Dilruba & Berechman, Joseph, 2007. "Contribution of transportation investments to county output," Transport Policy, Elsevier, vol. 14(4), pages 317-329, July.
    19. Congressional Budget Office, 2014. "An Update to the Budget and Economic Outlook: 2014 to 2024," Reports 45653, Congressional Budget Office.
    20. Evans, Paul & Karras, Georgios, 1994. "Are Government Activities Productive? Evidence from a Panel of U.S. States," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 1-11, February.
    21. Congressional Budget Office, 2014. "The Budget and Economic Outlook: 2014 to 2024," Reports 45010, Congressional Budget Office.
    22. Congressional Budget Office, 2014. "The Budget and Economic Outlook: 2014 to 2024," Reports 45010, Congressional Budget Office.
    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


    Cited by:

    1. Magazzino, Cosimo & Giolli, Lorenzo, 2021. "The relationship among railway networks, energy consumption, and real added value in Italy. Evidence form ARDL and Wavelet analysis," Research in Transportation Economics, Elsevier, vol. 90(C).
    2. Vagliasindi,Maria & Gorgulu,Nisan, 2021. "What Have We Learned about the Effectiveness of Infrastructure Investment as a FiscalStimulus ? A Literature Review," Policy Research Working Paper Series 9796, The World Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Magazzino, Cosimo & Giolli, Lorenzo, 2021. "The relationship among railway networks, energy consumption, and real added value in Italy. Evidence form ARDL and Wavelet analysis," Research in Transportation Economics, Elsevier, vol. 90(C).
    2. Pedro R.D. Bom & Jenny E. Ligthart, 2009. "How Productive is Public Capital? A Meta-Regression Analysis," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0912, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Troy Davig & Michael Redmond, 2014. "Accounting for changes in the U.S. budget deficit," Macro Bulletin, Federal Reserve Bank of Kansas City, pages 1-2, December.
    4. Stephanie Aaronson & Tomaz Cajner & Bruce Fallick & Felix Galbis-Reig & Christopher Smith & William Wascher, 2014. "Labor Force Participation: Recent Developments and Future Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 197-275.
    5. Helen Levy & Thomas Buchmueller & Sayeh Nikpay, 2015. "The Effect of Health Reform on Retirement," Working Papers wp329, University of Michigan, Michigan Retirement Research Center.
    6. Anirvan Banerji & Lakshman Achuthan, 2015. "The “Subpar” Recovery: A Long-standing Misunderstanding," Challenge, Taylor & Francis Journals, vol. 58(2), pages 139-148, March.
    7. Stephanie Lo & Kenneth Rogoff, 2015. "Secular stagnation, debt overhang and other rationales for sluggish growth, six years on," BIS Working Papers 482, Bank for International Settlements.
    8. R. Vincent Pohl, 2018. "Medicaid And The Labor Supply Of Single Mothers: Implications For Health Care Reform," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(3), pages 1283-1313, August.
    9. Sylvain Leduc & Glenn D. Rudebusch, 2014. "Does slower growth imply lower interest rates?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    10. Elburz, Zeynep & Nijkamp, Peter & Pels, Eric, 2017. "Public infrastructure and regional growth: Lessons from meta-analysis," Journal of Transport Geography, Elsevier, vol. 58(C), pages 1-8.
    11. John G. Fernald, 2015. "Productivity and Potential Output before, during, and after the Great Recession," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 1-51.
    12. Lisa J. Dettling & Sebastian Devlin-Foltz & Jacob Krimmel & Sarah Pack & Jeffrey P. Thompson, 2015. "Comparing Micro and Macro Sources for Household Accounts in the United States: Evidence from the Survey of Consumer Finances," Finance and Economics Discussion Series 2015-86, Board of Governors of the Federal Reserve System (U.S.).
    13. John Gibson, 2015. "Expanded Social Protection May Do More Harm Than Good: A Pessimistic Review," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(3), pages 652-659, September.
    14. Robert G Murphy & Adam Rohde, 2018. "Rational Bias in Inflation Expectations," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(1), pages 153-171, January.
    15. Schmidt, Torsten & Döhrn, Roland & Jäger, Philipp & an de Meulen, Philipp & Grozea-Helmenstein, Daniela & Rujin, Svetlana & Zwick, Lina, 2014. "Die wirtschaftliche Entwicklung im Ausland: Moderate Expansion der Weltwirtschaft," RWI Konjunkturberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, vol. 65(3), pages 5-38.
    16. Steven P. Cassou & Hedieh Shadmani & Jesús Vázquez, 2017. "Fiscal policy asymmetries and the sustainability of US government debt revisited," Empirical Economics, Springer, vol. 53(3), pages 1193-1215, November.
    17. Duarte Bom, P.R. & Ligthart, J.E., 2008. "How Productive is Public Capital? A Meta-Analysis," Discussion Paper 2008-10, Tilburg University, Center for Economic Research.
    18. Rodrigo Vergara & Elías Albagli, 2015. "Tasas de Interés de Largo Plazo en Economías Desarrolladas: Tendencias Recientes e Implicancias de Política Monetaria en Chile," Economic Policy Papers Central Bank of Chile 52, Central Bank of Chile.
    19. William E. Even & David A. Macpherson, 2019. "The Affordable Care Act and the Growth of Involuntary Part-Time Employment," ILR Review, Cornell University, ILR School, vol. 72(4), pages 955-980, August.
    20. Pedro R.D. Bom & Jenny E. Ligthart, 2014. "What Have We Learned From Three Decades Of Research On The Productivity Of Public Capital?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 889-916, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ndjtrf:262666. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.trforum.org/journal/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.