IDEAS home Printed from https://ideas.repec.org/p/qmw/qmwecw/404.html
   My bibliography  Save this paper

Infrastructure Shortage: A Gap Approach

Author

Listed:
  • Jose Miguel Albala-Bertrand

    (Queen Mary and Westfield College, University of London)

Abstract

We propose a method to estimate both whether there is an overall infrastructure shortage and the optimal share of infrastructure in gross fixed capital formation (GFCF). This is based on a two-gap model and linear programming, and is illustrated with the case of Mexico (1950-1985). The results show that Mexico appears to have started with an appropriate share of core infrastructures in GFCF. Then, there would have been an infrastructure shortage up until 1964, and an infrastructure surplus there after. It also shows that the optimal coefficient of infrastructure investment-to-optimal output would have been around 4.5 per cent, and that each unit of infrastructure would have optimally supported over three units of GFCF. A macroeconomic shortage do es not however mean that there would be a shortage everywhere, but it does imply that the economy as a whole would be in a net state of shortage. So our method may at least provide an appropriate context within which more focused analysis may be attempted.

Suggested Citation

  • Jose Miguel Albala-Bertrand, 1999. "Infrastructure Shortage: A Gap Approach," Working Papers 404, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:404
    as

    Download full text from publisher

    File URL: https://www.qmul.ac.uk/sef/media/econ/research/workingpapers/1999/items/wp404.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
    2. Chenery, Hollis B., 1984. "Economic Structure and Performance," Elsevier Monographs, Elsevier, edition 1, number 9780126800609 edited by Syrquin, Moshe & Taylor, Lance & Westphal, Larry E..
    3. Bacha, Edmar L., 1990. "A three-gap model of foreign transfers and the GDP growth rate in developing countries," Journal of Development Economics, Elsevier, vol. 32(2), pages 279-296, April.
    4. Aschauer, David Alan, 1989. "Does public capital crowd out private capital?," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 171-188, September.
    5. Feltenstein, Andrew & Ha, Jiming, 1995. "The Role of Infrastructure in Mexican Economic Reform," The World Bank Economic Review, World Bank, vol. 9(2), pages 287-304, May.
    6. Berg, Sigbjorn Atle, 1984. " Estimation of Production Capacities in a Putty-Clay Production Model: Norwegian Manufacturing Industries, 1962-81," Scandinavian Journal of Economics, Wiley Blackwell, vol. 86(3), pages 379-384.
    7. Hollis B. Chenery, 1953. "The Application of Investment Criteria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 67(1), pages 76-96.
    8. A. P. Thirlwall, 1989. "Growth and Development," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-19837-5, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jose Miguel Albala-Bertrand, 2004. "Can the Composition of Capital Constrain Potential Output? A Gap Approach," Working Papers 510, Queen Mary University of London, School of Economics and Finance.
    2. Jose Miguel Albala-Bertrand, 1999. "Infrastructure Shortage: A Gap Approach," Working Papers 404, Queen Mary University of London, School of Economics and Finance.
    3. Emmanuel C. Mamatzakis, 2007. "An Analysis of the Impact of Public Infrastructure on Productivity Performance of Mexican Industry," CESifo Working Paper Series 2099, CESifo.
    4. Marianna Belloc & Pietro Vertova, 2004. "How Does Public Investment Affect Economic Growth in HIPC? An Empirical Assessment," Department of Economics University of Siena 416, Department of Economics, University of Siena.
    5. Jose Miguel Albala-Bertrand, 2004. "Can the Composition of Capital Constrain Potential Output? A Gap Approach," Working Papers 510, Queen Mary University of London, School of Economics and Finance.
    6. Wang, Eric C., 2002. "Public infrastructure and economic growth: a new approach applied to East Asian economies," Journal of Policy Modeling, Elsevier, vol. 24(5), pages 411-435, August.
    7. Muhammad Javid, 2019. "Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis," Sustainability, MDPI, vol. 11(12), pages 1-22, June.
    8. Mamatzakis, E. C., 2003. "Public infrastructure and productivity growth in Greek agriculture," Agricultural Economics, Blackwell, vol. 29(2), pages 169-180, October.
    9. Pereira, Alfred M. & Roca-Sagales, Oriol, 2001. "Infrastructures and private sector performance in Spain," Journal of Policy Modeling, Elsevier, vol. 23(4), pages 371-384, May.
    10. Chiara DEL BO, 2009. "Recent advances in public investment, fiscal policy and growth," Departmental Working Papers 2009-25, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    11. Christophe Kamps, 2006. "New Estimates of Government Net Capital Stocks for 22 OECD Countries, 1960-2001," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-6.
    12. Jean-Christophe Dumont & Sandrine Mesplé-Somps, 2000. "L'impact des infrastructures publiques sur la compétitivité et la croissance : une analyse en EGC appliquée au Sénégal," Working Papers DT/2000/08, DIAL (Développement, Institutions et Mondialisation).
    13. Chatterjee, Santanu & Sakoulis, Georgios & Turnovsky, Stephen J., 2003. "Unilateral capital transfers, public investment, and economic growth," European Economic Review, Elsevier, vol. 47(6), pages 1077-1103, December.
    14. Ngongan, Elie, 2014. "Physical Infrastructures and Attractiveness of Private Capital in Sub-Saharan African (SSA) Countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(1), pages 7-21.
    15. Diego Martinez-Lopez, 2006. "Linking Public Investment to Private Investment. The Case of Spanish Regions," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(4), pages 411-423.
    16. Fedderke, J.W. & Bogetic, Z., 2009. "Infrastructure and Growth in South Africa: Direct and Indirect Productivity Impacts of 19 Infrastructure Measures," World Development, Elsevier, vol. 37(9), pages 1522-1539, September.
    17. Spiros Bougheas & Panicos O. Demetriades & Edgar L.W. Morgenroth, 2003. "International aspects of public infrastructure investment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(4), pages 884-910, November.
    18. Stuart J. Fowler & Bichaka Fayissa, 2007. "Public Capital Spending Shocks and the Price of Investment: Evidence from a Panel of Countries," Working Papers 200702, Middle Tennessee State University, Department of Economics and Finance.
    19. repec:dau:papers:123456789/1648 is not listed on IDEAS
    20. John A. Tatom, 2005. "Deficits and the Economy: All Deficits Are Not Created Equal," NFI Working Papers 2005-WP-01, Indiana State University, Scott College of Business, Networks Financial Institute.
    21. Atif Ansar & Bent Flyvbjerg & Alexander Budzier & Daniel Lunn, 2016. "Does infrastructure investment lead to economic growth or economic fragility? Evidence from China," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 32(3), pages 360-390.

    More about this item

    Keywords

    Infrastructure shortage; Two-gap model; Linear programming; Mexico;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qmw:qmwecw:404. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nicholas Owen (email available below). General contact details of provider: https://edirc.repec.org/data/deqmwuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.