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The impact of public investment on private investment spending in Latin America: 1980–95

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  • Miguel Ramirez

Abstract

This paper investigates the theoretical and empirical links between key economic variables and private spending in Latin America during 1980 to 1995. The empirical findings of this paper directly address the complementarity hypothesis which suggests that increases in public investment spending raise the marginal productivity of private capital, thereby inducing higher rates of private investment spending. This paper also addresses the issue of whether changes in the real exchange rate (expenditure-switching policies) have a deflationary effect on the economics of Latin America. The findings in this paper make an important contribution to the ongoing debate about which policies need to be promoted to raise and sustain the rate of private capital formation in Latin America—the region's future source of employment and income creation. Copyright International Atlantic Economic Society 2000

Suggested Citation

  • Miguel Ramirez, 2000. "The impact of public investment on private investment spending in Latin America: 1980–95," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 28(2), pages 210-225, June.
    • Handle: RePEc:kap:atlecj:v:28:y:2000:i:2:p:210-225
    DOI: 10.1007/BF02298362
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    References listed on IDEAS

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    1. Antonio Estache, 1994. "World Development Report: Infrastructure for Development," ULB Institutional Repository 2013/44144, ULB -- Universite Libre de Bruxelles.
    2. Pastor, Manuel Jr., 1989. "Current account deficits and debt accumulation in Latin America: Debate and evidence," Journal of Development Economics, Elsevier, vol. 31(1), pages 77-97, July.
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    5. Miguel D. Ramirez, 1993. "Stabilization and Adjustment in Latin America: A Neostructuralist Perspective," Journal of Economic Issues, Taylor & Francis Journals, vol. 27(4), pages 1015-1040, December.
    6. Benhabib, Jess & Jovanovic, Boyan, 1991. "Externalities and Growth Accounting," American Economic Review, American Economic Association, vol. 81(1), pages 82-113, March.
    7. Cardoso, Eliana, 1993. "Private Investment in Latin America," Economic Development and Cultural Change, University of Chicago Press, vol. 41(4), pages 833-848, July.
    8. David Alan Aschauer, 1989. "Public investment and productivity growth in the Group of Seven," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 13(Sep), pages 17-25.
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    10. Siri, Gabriel, 1996. "Social investment funds in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    11. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    12. Nader Nazmi & Miguel D. Ramirez, 1997. "Public And Private Investment And Economic Growth In Mexico," Contemporary Economic Policy, Western Economic Association International, vol. 15(1), pages 65-75, January.
    13. Rolf J.Lüders, 1991. "Massive Divestiture And Privatization Lessons From Chile," Contemporary Economic Policy, Western Economic Association International, vol. 9(4), pages 1-19, October.
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