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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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    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. Doris Prammer & Lukas Reiss, 2017. "Three small essays on public investment: economic rationales, the EU fiscal framework and some statistical comparisons," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q4/17, pages 32-47.
    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(8), pages 1957-1986, December.
    6. Cristina D. Checherita, 2009. "Variations on economic convergence: The case of the United States," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 259-278, June.
    7. Välilä, Timo, 2020. "Infrastructure and growth: A survey of macro-econometric research," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 39-49.
    8. Calderon, Cesar & Serven, Luis, 2014. "Infrastructure, growth, and inequality : an overview," Policy Research Working Paper Series 7034, The World Bank.
    9. Alexander Eck & Joachim Ragnitz & Simone Scharfe & Christian Thater & Bernhard Wieland, 2015. "Öffentliche Infrastrukturinvestitionen: Entwicklung, Bestimmungsfaktoren und Wachstumswirkungen," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 72.
    10. Nicholas Crafts & Alan Hughes, 2013. "Industrial Policy for the Medium to Long-term," Working Papers wp455, Centre for Business Research, University of Cambridge.
    11. 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.
    12. Nicholas Crafts, 2013. "Returning to Growth: Policy Lessons from History," Fiscal Studies, Institute for Fiscal Studies, vol. 34(2), pages 255-282, June.
    13. Crafts, Nicholas, 2012. "Creating Competitive Advantage: Policy Lessons from History," CAGE Online Working Paper Series 91, Competitive Advantage in the Global Economy (CAGE).
    14. 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.
    15. 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.
    16. 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.
    17. 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.
    18. 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.
    19. Karl Aiginger & Margarete Czerny & Gunther Tichy & Klaus S. Friesenbichler & Daniela Kletzan & Ewald Walterskirchen & Kurt Kratena & Wilfried Puwein & Michael Weingärtler, 2006. "Teilstudie 10: Produktivitätssteigernde Infrastrukturinvestitionen," WIFO Studies, WIFO, number 27449, December.
    20. 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.
    21. Thomas Brand, 2017. "Vitesse et composition des ajustements budgétaires en équilibre général : une analyse appliquée à la zone euro," Revue économique, Presses de Sciences-Po, vol. 68(HS2), pages 159-182.
    22. 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.
    23. 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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