Economics at your fingertips  

Growth, Welfare, and Public Infrastructure: A General Equilibrium Analysis of Latin American Economies

Felix Rioja

Journal of Economic Development, 2001, vol. 26, issue 2, 119-130

Abstract: Empirical studies have found infrastructure investment important for a country¡¯s economic performance, but have not provided clear guidelines for infrastructure policy or its effects on other macroeconomic variables. This paper develops a general equilibrium model of a small open economy to study the effects of public infrastructure on output, private investment and welfare. The model is parameterized and solved for three Latin American countries: Brazil, Mexico, and Peru. Results show that infrastructure can have positive effects on output, private investment and welfare. However, raising public infrastructure investment past a certain threshold can be detrimental. All three countries are shown to have under-invested in infrastructure in the 1970s and 1980s. The gains from optimal infrastructure policy are greatest for Peru, the country with lowest infrastructure expenditure.

Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15) Track citations by RSS feed

Downloads: (external link) (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:

Access Statistics for this article

Journal of Economic Development is currently edited by Sung Y. Park

More articles in Journal of Economic Development from Chung-Ang Unviersity, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sung Y. Park ().

Page updated 2023-01-23
Handle: RePEc:jed:journl:v:26:y:2001:i:2:p:119-130