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Is there a lack of public capital in the European Union?

Author

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  • Kamps, Christophe

    () (Kiel Institute for World Economics)

Abstract

This paper investigates whether there is a lack of public capital in European Union countries. The analysis builds on a new database providing internationally comparable capital stock estimates for 22 OECD countries, among these 14 EU countries, for the period 1960-2001. A simple model of endogenous growth is used in order to highlight the inherently nonlinear relationship between public capital and economic growth and to derive a measure of the growth-maximising public capital stock. Against this background, the empirical analysis provides estimates of the growth-maximising level of public capital for EU countries. The empirical results suggest that there currently is no lack of public capital in most "old" EU countries.

Suggested Citation

  • Kamps, Christophe, 2005. "Is there a lack of public capital in the European Union?," EIB Papers 3/2005, European Investment Bank, Economics Department.
  • Handle: RePEc:ris:eibpap:2005_003
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    References listed on IDEAS

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    1. Valila, Timo & Mehrotra, Aaron, 2005. "Evolution And Determinants Of Public Investment In Europe," Economic and Financial Reports 2005/1, European Investment Bank, Economics Department.
    2. Douglas Sutherland & Sonia Araujo & Balázs Égert & Tomasz Koźluk, 2009. "Infrastructure Investment: Links to Growth and the Role of Public Policies," OECD Economics Department Working Papers 686, OECD Publishing.
    3. Fidrmuc, Jan, 2001. "Democracy in transition economies: Grease or sand in the wheels of growth?," ZEI Working Papers B 09-2001, University of Bonn, ZEI - Center for European Integration Studies.
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    5. Philippe Martin, 1999. "Are European regional policies delivering?," Sciences Po publications info:hdl:2441/9343, Sciences Po.
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    Citations

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    Cited by:

    1. Jean-Marc Fournier, 2016. "The Positive Effect of Public Investment on Potential Growth," OECD Economics Department Working Papers 1347, OECD Publishing.
    2. repec:onb:oenbmp:y:2017:i:q4/17:b:2 is not listed on IDEAS
    3. Andrés Rodríguez-Pose & Yannis Psycharis & Vassilis Tselios, 2012. "Public investment and regional growth and convergence: Evidence from Greece," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 543-568, August.
    4. Nicholas Crafts, 2013. "Long-Term Growth in Europe: What Difference does the Crisis Make?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 224(1), pages 14-28, May.
    5. Fosu, Augustin Kwasi & Getachew, Yoseph Yilma & Ziesemer, Thomas H.W., 2016. "Optimal Public Investment, Growth, And Consumption: Evidence From African Countries," Macroeconomic Dynamics, Cambridge University Press, vol. 20(08), pages 1957-1986, December.
    6. Augustin Kwasi Fosu & Yoseph Getachew & Thomas H.W. Ziesemer, 2014. "Optimal Public Investment, Growth, and Consumption: Fresh Evidence from African Countries," Working Papers 201464, University of Pretoria, Department of Economics.
    7. Calderon, Cesar & Serven, Luis, 2014. "Infrastructure, growth, and inequality : an overview," Policy Research Working Paper Series 7034, The World Bank.
    8. Nicholas Crafts & Alan Hughes, 2013. "Industrial Policy for the Medium to Long-term," Working Papers wp455, Centre for Business Research, University of Cambridge.
    9. 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.
    10. Nicholas Crafts, 2013. "Returning to Growth: Policy Lessons from History," Fiscal Studies, Institute for Fiscal Studies, vol. 34(2), pages 255-282, June.
    11. Crafts, Nicholas, 2012. "Creating Competitive Advantage: Policy Lessons from History," CAGE Online Working Paper Series 91, Competitive Advantage in the Global Economy (CAGE).
    12. Shi, Hao & Huang, Shaoqing, 2014. "How Much Infrastructure Is Too Much? A New Approach and Evidence from China," World Development, Elsevier, vol. 56(C), pages 272-286.
    13. Cristina Checherita-Westphal & Andrew Hughes Hallett & Philipp Rother, 2014. "Fiscal sustainability using growth-maximizing debt targets," Applied Economics, Taylor & Francis Journals, vol. 46(6), pages 638-647, February.
    14. Ward Romp & Jakob de Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(s1), pages 6-52, April.
    15. Nicholas Crafts, 2014. "Ireland’s Medium-Term Growth Prospects: a Phoenix Rising?," The Economic and Social Review, Economic and Social Studies, vol. 45(1), pages 87-112.
    16. Yoseph Yilma Getachew, 2011. "Public Investment Policy, Distribution, and Growth: What Levels of Redistribution through Public Investment Maximize Growth?," DEGIT Conference Papers c016_072, DEGIT, Dynamics, Economic Growth, and International Trade.
    17. Cheteni, Priviledge, 2013. "Transport Infrastructure Investment and Transport Sector Productivity on Economic Growth in South Africa (1975-2011)," MPRA Paper 53175, University Library of Munich, Germany, revised 18 Jul 2013.
    18. repec:cai:recosp:reco_hs02_0159 is not listed on IDEAS
    19. Getachew, Yoseph Yilma, 2010. "Public capital and distributional dynamics in a two-sector growth model," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 606-616, June.
    20. Efraim Sadka, 2006. "Public-Private Partnerships; A Public Economics Perspective," IMF Working Papers 06/77, International Monetary Fund.

    More about this item

    Keywords

    public capital; economic growth;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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