Public and Private Investment as Catalysts for Growth: An analysis of emerging markets and developing economies with a focus on Asia

João Tovar Jalles, Donghyun Park and Irfan Qureshi

Journal of International Money and Finance, 2024, vol. 148, issue C

Abstract: The paper analyzes the growth impact of public and private investment shocks based on a large sample of emerging and developing countries over the period 1980–2021 with a particular focus on the Asian region. We develop new measures of investment shocks based on cyclically adjusted investment data. Estimations using local projections suggest that public investment shocks play a much greater role in boosting economic growth in comparison with private investment shocks. In EMDEs (including in Asia) the growth response to investment shocks is positive and much stronger in recessions (relative to economic expansions) and in countries with more fiscal space. Finally, public investment shocks in EMDE and Asian samples crowd-in private investment and private consumption.

Keywords: Fiscal multipliers; Public investment; Private investment; Local projections; Nonlinearities; Corruption; Fiscal space (search for similar items in EconPapers)
JEL-codes: C33 E22 E26 E62 H30 H50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:148:y:2024:i:c:s0261560624001530

DOI: 10.1016/j.jimonfin.2024.103166

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