IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-06h50001.html
   My bibliography  Save this article

How should we measure the return on public investment in a VAR?

Author

Listed:
  • Miguel St. Aubyn

    (ISEG, Technical University of Lisbon)

  • Álvaro Manuel Pina

    (ISEG, Technical University of Lisbon)

Abstract

A new method of empirically computing the macroeconomic returns to public investment is proposed. Pereira's (2000) technique is modified, and a measure which accounts for both public and private investment costs is suggested. An empirical application to US data shows that differences between alternative ways of measuring rates of return are non-trivial - taking into consideration the full investment effort halves estimated returns when partial public costs only are considered.

Suggested Citation

  • Miguel St. Aubyn & Álvaro Manuel Pina, 2006. "How should we measure the return on public investment in a VAR?," Economics Bulletin, AccessEcon, vol. 8(5), pages 1-4.
    • Handle: RePEc:ebl:ecbull:eb-06h50001
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2006/Volume8/EB-06H50001A.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aschauer, David Alan, 1989. "Does public capital crowd out private capital?," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 171-188, September.
    2. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    3. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    4. Alfredo M. Pereira, 2000. "Is All Public Capital Created Equal?," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 513-518, August.
    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. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.
    2. António Afonso & Miguel St. Aubyn, 2009. "Macroeconomic Rates Of Return Of Public And Private Investment: Crowding‐In And Crowding‐Out Effects," Manchester School, University of Manchester, vol. 77(s1), pages 21-39, September.
    3. Syed Ammad Ali & Qazi Masood Ahmed & Lubna Naz, 2016. "Public spending on human capital formation and economic growth in Pakistan," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 23(1), pages 1-20, June.
    4. Yoshino, Naoyuki & Abidhadjaev, Umid, 2017. "An impact evaluation of investment in infrastructure: The case of a railway connection in Uzbekistan," Journal of Asian Economics, Elsevier, vol. 49(C), pages 1-11.
    5. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2010. "Dynamic Macroeconomic Effects of Public Capital: Evidence from Regional Italian Data," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(1), pages 29-66, April.
    6. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2012. "The Macroeconomic Impact of Infrastructures: A Literature Review and Empirical Analysis on the Case of Italy," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    7. António Afonso & Miguel St. Aubyn, 2019. "Economic growth, public, and private investment returns in 17 OECD economies," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 18(1), pages 47-65, February.
    8. António Afonso & Miguel St. Aubyn, 2016. "Economic Growth and Public and Private Investment Returns," Working Papers Department of Economics 2016/14, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.

    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. Pina, Alvaro Manuel & St. Aubyn, Miguel, 2005. "Comparing macroeconomic returns on human and public capital: An empirical analysis of the Portuguese case (1960-2001)," Journal of Policy Modeling, Elsevier, vol. 27(5), pages 585-598, July.
    2. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2010. "Dynamic Macroeconomic Effects of Public Capital: Evidence from Regional Italian Data," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(1), pages 29-66, April.
    3. Mustafa Ismihan & Kivilcim Metin-Ozcan & Aysit Tansel, 2002. "Macroeconomic Instability, Capital Accumulation and Growth: The Case of Turkey 1963-1999," Working Papers 0209, Economic Research Forum, revised 21 Mar 2002.
    4. Carolina Cosculluela-Mart󹑺 & Rafael Flores de Frutos, 2013. "Housing investment in Spain: has it been the main engine of growth?," Applied Economics, Taylor & Francis Journals, vol. 45(14), pages 1835-1843, May.
    5. Muhammad Javid, 2019. "Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis," Sustainability, MDPI, vol. 11(12), pages 1-22, June.
    6. Carolina Cosculluela-Martínez, 2020. "Sustainable Knowledge Investment Increases Employment and GDP in the Spanish Agricultural Sector More Than Other Investments," Sustainability, MDPI, vol. 12(8), pages 1-14, April.
    7. Mathilde Le Moigne & Francesco Saraceno & Sébastien Villemot, 2016. "Probably Too Little, Certainly Too Late. An Assessment of the Juncker Investment Plan," PSE Working Papers hal-03459360, HAL.
    8. Carolina Cosculluela-Martínez & Juan Manuel Menéndez-Blanco, 2021. "Assessment Environmental Sustainability and Gender Equality through Crops Livestock Investment Worldwide," Sustainability, MDPI, vol. 13(13), pages 1-21, July.
    9. Mr. Shaun K. Roache, 2007. "Public Investment and Growth in the Eastern Caribbean," IMF Working Papers 2007/124, International Monetary Fund.
    10. Delorme, Charles Jr. & Thompson, Herbert Jr. & Warren, Ronald Jr., 1999. "Public Infrastructure and Private Productivity: A Stochastic-Frontier Approach," Journal of Macroeconomics, Elsevier, vol. 21(3), pages 563-576, July.
    11. 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.
    12. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2012. "Network effects of public transport infrastructure: Evidence on Italian regions," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 515-541, August.
    13. Ljungwall, Christer, 2005. "State fixed investment and non-state sector growth in China," Journal of Policy Modeling, Elsevier, vol. 27(2), pages 211-229, March.
    14. António Afonso & Miguel St. Aubyn, 2009. "Macroeconomic Rates Of Return Of Public And Private Investment: Crowding‐In And Crowding‐Out Effects," Manchester School, University of Manchester, vol. 77(s1), pages 21-39, September.
    15. Boehm, Christoph E., 2020. "Government consumption and investment: Does the composition of purchases affect the multiplier?," Journal of Monetary Economics, Elsevier, vol. 115(C), pages 80-93.
    16. João Sousa Andrade & António Portugal Duarte, 2016. "Crowding-in and crowding-out effects of public investments in the Portuguese economy," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(4), pages 488-506, July.
    17. Masood Ahmed Qazi & Syed Ammad, 2021. "Public investment efficiency and sectoral economic growth in Pakistan," Development Policy Review, Overseas Development Institute, vol. 39(3), pages 450-470, May.
    18. Alfredo Marvão Pereira & Rui M. Pereira, 2015. "Is All Infrastructure Investment Created Equal? The Case of Portugal," Working Papers 156, Department of Economics, College of William and Mary.
    19. James Heintz, 2010. "The impact of public capital on the US private economy: new evidence and analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(5), pages 619-632.
    20. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.

    More about this item

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H4 - Public Economics - - Publicly Provided Goods

    Statistics

    Access and download statistics

    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:ebl:ecbull:eb-06h50001. 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: John P. Conley (email available below). General contact details of provider: .

    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.