MACROECONOMIC RATES OF RETURN OF PUBLIC AND PRIVATE INVESTMENT: CROWDING-IN AND CROWDING-OUT EFFECTS

Antonio Afonso and Miguel St. Aubyn ()

Manchester School, 2009, vol. 77, issue s1, pages 21-39

Abstract: Using annual data from 17 developed economies, we evaluate the macroeconomic effects of public and private investment through a five-variable vector autoregression. From impulse response functions, we assess the extent of crowding-in or crowding-out of both components of investment. We also compute the associated macroeconomic rates of return of public and private investment for each country. The results show the existence of positive effects of public investment and private investment on output. On the other hand, the crowding-in effects of public investment on private investment vary across countries, while the crowding-in effect of private investment on public investment is more generalized. Copyright © 2009 The Authors. Journal compilation © 2009 Blackwell Publishing Ltd and The University of Manchester.

Date: 2009

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Related works:
Working Paper: Macroeconomic rates of return of public and private investment: crowding-in and crowding-out effects (2008)
Working Paper: Macroeconomic Rates of Return of Public and Private Investment: Crowding-in and Crowding-out Effects (2008)
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