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Public and private investments: Long-run asymmetric effects in France and the US

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  • Baussola, Maurizio
  • Carvelli, Gianni

Abstract

We analyse whether private investments are impacted asymmetrically by public investments and how any asymmetry evolves over time. We conduct time series analyses for France and the US within a flexible empirical framework exploiting quarterly data over 1960Q1–2022Q4. The results are summarized as follows: France's private investments are positively impacted by public investments both in the short- and long-run; public investments have a neutral or negative effect on private investments in the US; the asymmetric effects in France become significant and persistent after 10 quarters; some evidence of asymmetry emerges for the US in the long-run.

Suggested Citation

  • Baussola, Maurizio & Carvelli, Gianni, 2023. "Public and private investments: Long-run asymmetric effects in France and the US," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s154461232300689x
    DOI: 10.1016/j.frl.2023.104317
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    More about this item

    Keywords

    Asymmetric effects; Cointegration; NARDL; Public investments; Private investments;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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