Il rapporto tra capitale pubblico e altre variabili macroeconomiche: analisi della letteratura

Federici, Andrea (2018): Il rapporto tra capitale pubblico e altre variabili macroeconomiche: analisi della letteratura.

Abstract

This work critically analyses all the contributions in public investment theory. Particularly I discuss the relationship between the stock of public capital and some macroeconomic variable such as output, employment and the stock of private capital. In other words, how the cited variables have an influence on each other? And if the answer is positive, how much is it? To do this it will be necessary to survey critically the literature developed around this topic beginning from the paper of Aschauer D.A. (1988), which represents the starting point of the debate. In fact, this matter of study explodes after his works. For this reason, we try to explain the main approaches in the literature about this field of research. Then we try to analyse the general question and the most important problems about the definition of public capital and the link with some macroeconomic variables and the private factors of production. Finally, we discuss the most problematic aspects from an econometric point of view. We also synthetize the most popular studies on this topic. We discovered most of these studies found a positive relationship of public capital respect to output, employment and the stock of private capital. There is now more consensus than in the past that public capital has a positive influence on the economic system of a country. However, the impact reported by recent studies is not as big as some earlier papers suggested.

• Item Type: MPRA Paper
• English Title: The relationship between public capital and other macroeconomic variable: a literature review
• Language: Italian
• Keywords: Capitale pubblico, Investimento pubblico, Crescita economica, Occupazione, Capitale privato
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock

References

Aaron, H.J. (1990). "Discussion", in Munnell, A.H. (ed.), “Is there a shortfall in public capital investment?”, Federal Reserve Bank of Boston, Boston, USA.

Ai, C., and Cassou, S.P. (1995). "A normative analysis of public capital” Applied Economics, (27), pp. 1201-1209.

Albala-Bertrand, J.M. (2004). "Can the composition of capital constrain potential output? A gap approach". Queen Mary University of London, Department of Economics, Working Paper No. 510.

Albala-Bertrand, J.M, and Mamatzakis, E.C. (2004). "The impact of public infrastructure on the productivity of the Chilean economy". Review of Development Economics, (8:2), pp. 266-278.

Aschauer, D.A. (1989). "Is public expenditure productive?". Journal of Monetary Economics (23), pp. 177-200.

Aschauer, D.A. (2000). "Do states optimize? Public capital and economic growth". The Annals of Regional Science, (34), pp. 343-363.

Batina, R.G. (1998). "On the long run effects of public capital and disaggregated public capital on aggregate output". International Tax and Public Finance, (5:3), pp. 263-281.

Berndt, E.R. and Hansson, B. (1991). "Measuring the contribution of public infrastructure capital in Sweden", NBER Working Paper No. 3842.

Bonaglia, F., La Ferrara, E., and Marcellino, M. (2001). "Public capital and economic performance: Evidence from Italy". IGIER Working Paper No. 163.

Boscà, J.E., Escriba, J., and Murgui, M.J. (2000). "The effect of public infrastructure on the private productive sector of Spanish regions". Journal of Regional Science, (42), pp. 301-326.

Bougheas, S., Demetriades, P.O., and Morgenroth, E.L.W. (1999). "Infrastructure, transport costs and trade". Journal of International Economics (47), pp. 169-189. Cadot, O., Róller, L.H., and Stephan, A. (1999). "A political economy model of infrastructure allocation: An empirical assessment". CEPR Discussion Paper No. 2336.

Cadot, O., Róller, L.H., and Stephan, A. (2002). "Contribution to productivity or pork barrel? The two faces of infrastructure investment". WZB Discussion Paper No. 02-09. Calderón, C. and Servén, L. (2002). "The output cost of Latin America's infrastructure gap". Central Bank of Chile Working Paper No. 186.

Canaleta, C.G., Arzoz, P.P., and Gérate, M.R. (1998). "Public capital, regional productivity and spatial spillovers". Universidad Pública de Navarra, Lan Gaiak Departamento de Economia Working Paper No. 9811.

Canning D. (1998). "A database of world infrastructure stocks, 1950-1995". World Bank Economic Review, (12), pp. 529-547.

Canning, D. (1999). "The contribution of infrastructure to aggregate output". World Bank Working Paper No. 2246.

Canning, D. and Pedroni, P. (1999). "Infrastructure and long run economic growth". Mimeo.

Canning, D. and Bennathan, E. (2000). "The social rate of return on infrastructure investments". World Bank Working Paper No. 2390.

Charlot, S. and Schmitt, B. (1999). "Public infrastructure and economic growth in France's regions". Paper No.129 for ERSA 39th Congress, Dublin, Ireland.

Cohen, J.P. and Morrison Paul, C.J. (2004). "Public infrastructure investment, interstate spatial spillovers, and manufacturing costs". The Review of Economics and Statistics, (86:2), pp. 551-560.

Conrad, K. and Seitz, H. (1994), "The economic benefits of public infrastructure". Applied Economics, (26), pp. 303-311.

Crowder, W.J. and Himarios, D. (1997). "Balanced growth and public capital: An empirical analysis". Applied Economics, (29:8), pp.1045-1053.

De la Fuente, A., and Vives. X. (1995). "Infrastructure and education as instruments of regional policy: evidence from Spain". Economic Policy, pp. 13-51.

Delgado Rodriguez, M.J., and Alvarez Ayuso, I. (2000). "Public productive infrastructure and economic growth". Paper for ERSA 40th Congress.

Demetriades, P.O., and Mamuneas, T.P. (2000). "Intertemporal output and employment effects of public infrastructure capital: Evidence from 12 OECD economies". Economic Journal, (110), pp. 687-712.

Devarajan S., Swaroop, V., and Zou, H.F. (1996). "The composition of public expenditure and economic growth': Journal of Monetary Economics, (37), pp. 313-344.

Easterly, W. and Rebelo, S. (1993). "Fiscal policy and economic growth: an empirical investigation". Journal of Monetary Economics, (32), pp. 417- 458.

Eberts, R.W. (1986), "Estimating the contribution of urban public infrastructure to regional growth". Federal Reserve Bank of Cleveland Working Paper No. 8610.

Esfahani, H., and Ramíres, M.T. (2003). "Institutions, infrastructure and economic growth". Journal of Development Economics, (70), pp. 443-477.

Evans, P., and Karras, G. (1994). "Is government capital productive? Evidence from a panel of seven countries". Journal of Macroeconomics, (16), pp. 271-279.

Everaert, G. (2003). "Balanced growth and public capital: an empirical analysis with 1(2) trends in capital stock data". Economic Modelling, (20), pp. 741-763.

Everaert, G. and Heylen, F. (2004). "Public capital and long-term labour market performance in Belgium". Journal of Policy Modelling, (26), pp. 95-112.

Fernald, J. (1999). "Assessing the link between public capital and productivity". American Economic Review, (89:3), pp. 619-638.

Ferrara, E.L. and Marcellino, M. (2000). "TFP, costs, and public infrastructure: An equivocal relationship". IGIER Working Paper No. 176.

Finn, M. (1993), "Is all government capital productive?". Federal Reserve Bank of Richmond Economic Quarterly, (79), pp. 53-80.

Flores de Frutos, R., Garcia-Diez, M., and Perez-Amaral, T. (1998). "Public capital and economic growth: An analysis of the Spanish economy". Applied Economics, (30:8), pp. 985-994.

Ford, R., and Poret, P. (1991). "Infrastructure and private-sector productivity". OECD Economic Studies, (17), pp. 63-89.

Fujita, M., Krugman, P.R. and Venables, A.J. (1999). The spatial economy, MIT Press, Cambridge, USA.

Ghali, K.H. (1998). "Public investment and private capital formation in a vector error-correction model of growth". Applied Economics, (30), pp. 837-844.

Gramlich, E.M. (1994). "Infrastructure investment: A review essay". Journal of Economic Literature, (32), pp. 1176-1196.

Gwartney, J., Holcombe, R.G. and Lawson, R. (2004). "Institutions and the impact of investment on growth". Paper presented at the Conference of the Association Private Enterprise Education, APEE, (April), Bahamas.

Holtz-Eakin, D., and Lovely, M.E. (1996). "Scale economics, returns to variety, and the productivity of public infrastructure". Regional Science and Urban Economics, (26), pp. 105-123.

Holtz-Eakin, D., and Schwartz, A.E. (1995). "Infrastructure in a structural model of economic growth" Regional Science and Urban Economics, (25), pp. 131-151.

Hulten, C.R., and Schwab, R.M. (1991). "Is there too little public capital?" American Enterprise Institute Conference on infrastructure needs.

Hulten, C.R. (1996). "Infrastructure capital and economic growth: How well you use it may be more important than how much you have". NBER Working Paper No. 5847.

Kamps, C. (2004a). "New estimates of government net capital stocks for 22 OECD countries 1960-2001". IMF Working Paper No.04/67; forthcoming in: IMF Staff Papers.

Kamps, C. (2004b). "The dynamic effects of public capital: VAR evidence for 22 OECD countries". Kiel Institute of World Economics Working Paper No. 1224.

Kemmerling, A. and Stephan, A. (2002). "The contribution of local public infrastructure to private productivity and its political economy: Evidence from a panel of large German cities". Public Choice, (113), pp. 403-422.

Krugman, P.R. (1991). "Increasing returns and economic geography". Journal of Political Economy, (99), pp. 483-499.

Leamer, E.E. (1983). "Let's take the con out of econometrics". American Economic Review, (73:3), pp. 31-43.

Levine, R., and Renelt, D. (1992). "A sensitivity analysis of cross-country growth regressions". American Economic Review, (82), pp. 942-963.

Ligthart, J.E. (2002). "Public capital and output growth in Portugal: An empirical analysis". European Review of Economics and Finance, (1:2), pp. 3-30.

Mamatzakis, E.C. (1999a). "Public infrastructure, private input demand, and economic performance of the Greek industry". Queen Mary & Westfield College Working Paper No. 406.

Mamatzakis, E.C. (1999b). "Testing for long run relationship between infrastructure and private capital productivity: A time series analysis for the Greek industry". Applied Economics Letters, (6:4), pp. 243-246.

Milbourne, R., Otto, G. and Voss, G. (2003). "Public investment and economic growth". Applied Economics, (35:5), pp. 527-540.

Mittnik, S. and Neumann, T. (2001). "Dynamic effects of public investment: Vector autoregressive evidence from six industrialized countries". Empirical) Economics, (26), pp. 429-446.

Moreno, R., López-Bazo, E. and Artís, M. (2003). "On the effectiveness of private and public capital”. Applied Economics, (35), pp. 727-740.

Munnell, A.H. (1990a). "Why has productivity growth declined? Productivity and public investment". New England Economic Review, (January/February), pp.2-22.

Munnell, A.H. (1990b). "How does public infrastructure affect regional economic performance?" New England Economic Review, (September/October), pp. 11-32.

Munnell, A.H. (1992), "Policy watch. Infrastructure investment and economic growth". Journal of Economic Perspectives, (6), pp.189-198.

Oxley, H. and Martin, J.P. (1991). "Controlling government spending and deficits: Trends in the 1980s and prospects for the 1990s". OECD Economic Studies No. 17, pp. 145-189.

Pereira, A.M. (2000). "Is all public capital created equal?" Review of Economics and Statistics, (82:3), pp. 513-518.

Pereira, A.M. (2001). "On the effects of public investment on private investment: what crowds in what?" Public Finance Review, (29:1), pp. 3-25.

Pereira, A.M. and Andraz, J.M. (2001). "On the impact of public investment on the performance of U.S. industries". Public Finance Review, (31:1), pp. 66-90.

Pereira, A.M. and Flores de Frutos, R. (1999). "Public capital accumulation and private sector performance". Journal of Urban Economics, (46:2), pp. 300-322.

Pereira, A.M. and Roca-Sagales, 0. (1999). "Public capital formation and regional development in Spain". Review of Development Economics, (3:3), pp. 281-294.

Pereira, A.M. and Roca-Sagales, 0. (2001). "Infrastructures and private sector performance in Spain". Journal of Policy Modelling, (23:4), pp. 371-384.

Pereira, A.M., and Roca Sagales, 0. (2003). "Spillover effects of public capital formation: Evidence from the Spanish regions". Journal of Urban Economics, (53:2), pp. 238-256.

Pesaran, M. H. and R. P. Smith. (1998). "Structural Analysis of Cointegrating VARs," Journal of Economic Surveys 12, 471-505.

Phillips, P.C.B. (1998). "Impulse response and forecast error variance asymptotics in nonstationary VARs". Journal of Econometrics (83:1-2), pp. 21-56.

Pritchett, L. (1996). "Mind your P's and Q's". World Bank Policy Research Paper No. 1660.Sala-i-Martin, X. (1997). "I just ran two million regressions". American Economic Review, (87:2), pp. 178-183.

Sanchez-Robles, B. (1998). "infrastructure investment and growth: Some empirical evidence". Contemporary Economic Policy, (16), pp. 98-108.

Seung, C.K., and Kraybill, D.S. (2001). "The effects of infrastructure investment: A two sector dynamic computable general equilibrium analysis for Ohio". International Regional Science Review, (24:2), pp. 261-281.

Shioji, E (2001). "Public capital and economic growth: A convergence approach". Journal of Economic Growth, (6), pp. 205-227.

Sims, C. A. (1980). "Macroeconomics and Reality," Econometrica 48,1-48.

Sims, C. A. (1987). "Comment on 'D.E. Runlde, Vector Autoregressions and Reality," Journal of Business and Economic Statistics 5,443-449.

Sims, C. A. and T. Zha. (1999). "Error Bands for Impulse Responses," Econometrica 67,1113-1155.

Sims, C., Stock, J., and Watson, M. (1990). "Inference in linear time series models with some unit roots", Econometrica, (58), pp. 113-144.

Stephan, A. (2000). "Regional infrastructure policy and its impact on productivity: A comparison of Germany and France". Applied Economics Quarterly, (46), pp. 327-356.

Stephan, A. (2003). "Assessing the contribution of public capital to private production: Evidence from the German manufacturing sector". International Review of Applied Economics, (17), pp. 399-418.

Tatom, J.A. (1991). "Public capital and private sector performance". Federal Reserve Bank of St Louis Review, (73), pp. 3-15.

Temple, J. (2000). "Growth regressions and what the textbooks don't tell you". Bulletin of Economic Research, (52:3), pp. 181-205.

Venables, A.J. (1996). "Equilibrium locations of vertically linked industries". International Economic Review, (37:2), pp. 341-359

Vijverberg, W.P.M., Vijverberg, C.P.C., and Gamble, J.L. (1997). "Public capital and private production" Review of Economics and Statistics, (79:2), pp. 267-278.

Voss, G.M. (2002). "Public and private investment in the United States and Canada". Economic Modelling, (19), pp. 641-664.

World Bank (1994), Annual) Report, World Bank.