The Effect of Investment in Transportation Infrastructure on the Debt-to-GDP Ratio

Doron Lavee, Gilat Beniad and Charles Solomon

Transport Reviews, 2011, vol. 31, issue 6, 769-789

Abstract: This paper examines the relationship between investment in transportation infrastructure capital and the debt-to-gross domestic product (GDP) ratio. We analyse the effect of bringing forward investment originally planned for future years to be executed during times of economic crisis and also consider the possible advantages of carrying out such investments with private sector financing. This paper presents a model which shows how policy aimed to encourage investment in transportation infrastructure projects through private sector participation may help raise long-term GDP and thus lead to a lower debt-to-GDP ratio. The theoretical model is then applied to current empirical data from Israel.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:taf:transr:v:31:y:2011:i:6:p:769-789

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DOI: 10.1080/01441647.2011.596581

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