Does Public Investment Boost Economic Growth? Evidence from An Open-Economy Macro Model for India

Soubarna Pal ()

No E2008/24, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: Using annual data for India for the period 1984-2003 and employing parametric technique (GMM), the present paper jointly determines GDP growth, real exchange rate and net foreign assets in Indian economy. There is evidence that public investment exerts a significant influence on real exchange rate and the growth rate and does so non-linearly. A comparison of the Indian estimates with those available for the UK and the USA economies is also revealing and highlights the role of governance on the effects of public investment.

Keywords: Public investment; Economic growth; Real exchange rate; Simultaneous model; Generalised method of moments (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cwa, nep-dev and nep-mac
Date: 2008-10

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