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On the Long-term Economic and Budgetary Effects of Public-Sector Investment

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  • Alfredo Marvão Pereira
  • Maria de Fátima Pinho
  • José da Silva Costa

Abstract

In this work we use a VAR/ECM approach to determine the effects of aggregated public investment on output, employment and private investment for five EU countries. Based on impulse-response functions associated to the estimated VAR, we obtain long-term accumulated elasticities, long-term marginal productivities and annual rates of return, allowing for an economy performance analysis. Based on our results, we can conclude that, generally, the aggregated public investment crowds in output, employment and private investment, and it can be considered a useful tool in growth in the long run.

Suggested Citation

  • Alfredo Marvão Pereira & Maria de Fátima Pinho & José da Silva Costa, 2005. "On the Long-term Economic and Budgetary Effects of Public-Sector Investment," ERSA conference papers ersa05p146, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa05p146
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    References listed on IDEAS

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