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Public capital spending in The Netherlands: developments and explanations

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  • Jan-Egbert Sturm
  • Jakob De Haan

Abstract

As in many other OECD countries, government investment expressed as share of GDP has decreased in The Netherlands. Using the concept of Granger causality, we test in a bivariate vector autoregression framework various hypothesis that have been put forward to explain this decline. It is concluded that private investment and output are related to public investment. Demographic variables also influence public investment. The number of future civil servants affects investment in buildings. Our results do not support the view that higher interest burdens crowded out public investment. Finally, no confirmation is found for the idea that additional infrastructure triggers growth of the number of vehicles.

Suggested Citation

  • Jan-Egbert Sturm & Jakob De Haan, 1998. "Public capital spending in The Netherlands: developments and explanations," Applied Economics Letters, Taylor & Francis Journals, vol. 5(1), pages 5-10.
  • Handle: RePEc:taf:apeclt:v:5:y:1998:i:1:p:5-10
    DOI: 10.1080/758540117
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    References listed on IDEAS

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    1. Magnus Henrekson & Johan Lybeck, 1988. "Explaining the growth of government in Sweden: A disequilibrium approach," Public Choice, Springer, vol. 57(3), pages 213-232, June.
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    Cited by:

    1. Amin Karimu & George Adu & George Marbuah & Justice Tei Mensah & Franklin Amuakwa-Mensah, 2017. "Natural Resource Revenues and Public Investment in Resource-rich Economies in Sub-Saharan Africa," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 107-130, November.
    2. repec:zbw:rwirep:0557 is not listed on IDEAS
    3. Philipp Jäger & Torsten Schmidt, 2015. "The Political Economy of Public Investment when Population is Aging – A Panel Cointegration Analysis," Ruhr Economic Papers 0557, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    4. Erdal Atukeren, 2005. "R&D Races and Spillovers between the EU and the US: Some Causal Evidence," KOF Working papers 05-105, KOF Swiss Economic Institute, ETH Zurich.
    5. repec:dau:papers:123456789/1648 is not listed on IDEAS
    6. Jäger, Philipp & Schmidt, Torsten, 2016. "The political economy of public investment when population is aging: A panel cointegration analysis," European Journal of Political Economy, Elsevier, vol. 43(C), pages 145-158.
    7. Gupta, Sanjeev & Liu, Estelle X. & Mulas-Granados, Carlos, 2016. "Now or later? The political economy of public investment in democracies," European Journal of Political Economy, Elsevier, vol. 45(C), pages 101-114.
    8. Sturm, Jan-Egbert, 2001. "Determinants of public capital spending in less-developed countries," CCSO Working Papers 200107, University of Groningen, CCSO Centre for Economic Research.
    9. Sturm, Jan-egbert & Jacobs, Jan & Groote, Peter, 1999. "Output Effects of Infrastructure Investment in the Netherlands, 1853-1913," Journal of Macroeconomics, Elsevier, vol. 21(2), pages 355-380, April.

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