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The Effects of Infrastructure Investment: A Two-Sector Dynamic Computable General Equilibrium Analysis for Ohio

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  • Chang K. Seung

    (Department of Applied Economics and Statistics, University of Nevada, Reno, cks@unr.nevada.edu)

  • David S. Kraybill

    (Department of Agricultural, Environmental, and Development Economics, The Ohio State University, kraybill.1@osu.edu)

Abstract

The effects of increased public investment on regional output and welfare in Ohio are investigated using a regional dynamic computable general equilibrium model. Public investment affects the growth of the state economy, although the magnitude of the effect depends on the public capital elasticity. Our simulations indicate that public capital is underprovided in Ohio in base year 1990. Accounting for congestion in the use of infrastructure diminishes the positive effects of increased public investment only slightly. Beyond some level, more infrastructure investment does not increase the household welfare and can actually reduce it.

Suggested Citation

  • Chang K. Seung & David S. Kraybill, 2001. "The Effects of Infrastructure Investment: A Two-Sector Dynamic Computable General Equilibrium Analysis for Ohio," International Regional Science Review, , vol. 24(2), pages 261-281, April.
    • Handle: RePEc:sae:inrsre:v:24:y:2001:i:2:p:261-281
    DOI: 10.1177/016001701761013150
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    References listed on IDEAS

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    3. Glyn Wittwer & Mark Horridge, 2010. "Bringing Regional Detail to a CGE Model using Census Data," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(2), pages 229-255.
    4. Natalia Gennadyevna Zakharchenko & Olga Valeryevna Dyomina, 2015. "Modelling Energy - Economy Interactions: The Far East Experience," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 62-90.
    5. 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.
    6. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim, 2010. "Balanced Budget Government Spending in a Small Open Regional Economy," SIRE Discussion Papers 2010-68, Scottish Institute for Research in Economics (SIRE).
    7. Byers, Steven & Cutler, Harvey & Davies, Stephen P., 2004. "Estimating Costs and Benefits of Economic Growth: A CGE-Based Study of Tax Incentives in a Rapidly Growing Region," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 34(4), pages 1-20.
    8. Euijune Kim & Geoffrey J.D. Hewings & Hidayat Amir, 2015. "Project Evaluation of Transportation Projects: an Application of Financial Computable General Equilibrium Model," ERSA conference papers ersa15p453, European Regional Science Association.
    9. Federici, Andrea, 2018. "Il rapporto tra capitale pubblico e altre variabili macroeconomiche: un'applicazione empirica [The relationship between public capital and other macroeconomic variables: an empirical application]," MPRA Paper 88516, University Library of Munich, Germany.
    10. Patrizio Lecca & Javier Barbero Jimenez & Martin Aaroe Christensen & Andrea Conte & Francesco Di Comite & Jorge Diaz-Lanchas & Olga Diukanova & Giovanni Mandras & Damiaan Persyn & Stylianos Sakkas, 2018. "RHOMOLO V3:A Spatial Modelling Framework," JRC Research Reports JRC111861, Joint Research Centre.
    11. Kim, Euijune & Hewings, Geoffrey J.D. & Amir, Hidayat, 2017. "Economic evaluation of transportation projects: An application of Financial Computable General Equilibrium model," Research in Transportation Economics, Elsevier, vol. 61(C), pages 44-55.
    12. Hua Zhong & Michael H. Taylor & Kimberly S. Rollins & Dale T. Manning & Christopher G. Goemans, 2019. "Who pays for water scarcity? Evaluating the welfare implications of water infrastructure investments for cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 559-600, December.
    13. Carmen D. Ã lvarez-Albelo, 2018. "A calibration of the output elasticity of public capital," Economics Bulletin, AccessEcon, vol. 38(2), pages 761-771.
    14. Federici, Andrea, 2018. "Il rapporto tra capitale pubblico e altre variabili macroeconomiche: analisi della letteratura [The relationship between public capital and other macroeconomic variable: a literature review]," MPRA Paper 88515, University Library of Munich, Germany.
    15. Yoshino, Naoyuki & Abidhadjaev, Umid, 2016. "Impact of Infrastructure Investment on Tax: Estimating Spillover Effects of the Kyushu High-Speed Rail Line in Japan on Regional Tax Revenue," ADBI Working Papers 574, Asian Development Bank Institute.
    16. Chang K. Seung & Michael G. Dalton & André E. Punt & Dusanka Poljak & Robert Foy, 2015. "Economic Impacts Of Changes In An Alaska Crab Fishery From Ocean Acidification," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-35, November.
    17. Melvin Ayogu, 0. "Infrastructure and Economic Development in Africa: A Review-super- †," Journal of African Economies, Centre for the Study of African Economies, vol. 16(suppl_1), pages -126.

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