The effect of public investment in Europe: a model-based assessment

Igor Vetlov, Marien Ferdinandusse, Jasper De Jong and Josip Funda

No 2021, Working Paper Series from European Central Bank

Abstract: We consider the effect of an increase in public investments on output in Europe against the background of a sharp drop of public investments in a number of EU countries during the crisis and subsequent policy discussions on the need to stimulate public investments. We start with a brief overview of recent developments in public investments, including some methodological issues, and provide a literature overview of the effect of public investments on growth. On the basis of updated estimates of the public capital stock, we estimate the output response to a public capital impulse, using VAR models. In addition, using a structural model, we investigate the sensitivity of the macroeconomic impact of an increase in public investments to alternative assumptions about economic structures and policy implementations. JEL Classification: E32, E62, C30

Keywords: euro area; fiscal policy; general equilibrium modelling; public investment (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-eec and nep-mac
Note: 673741
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp2021.en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20172021

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().