Economics at your fingertips  

Public investment and economic activity in Mexico, 1925-1981

Felipe de Jesús Fonseca, Manuel Gómez-Zaldívar and Daniel Ventosa-Santaulària

Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), 2020, vol. 14, No 2020-6, 24 pages

Abstract: The authors construct a historical database of public investment (both total and broken down into its main components) for the period 1925 to 1981 in order to measure its impact on economic activity. Given the possible presence of crowding-out effects between public investment and private investment, in their analysis they control for the latter. The results suggest that: i) public investment had a significant impact on output, one which varies depending on the category of public investment considered, and; ii) private and public investment are positively related, i.e., public investment has a crowding-in effect on private investment, and both have a positive and significant impact on GDP. The results contrast with those of previous studies that have analyzed this relationship, though using a different time period, one that includes the economic liberalization era. Nevertheless, these differences can be rationalized by the findings of Ilzetzki et al. (How Big (Small?) are Fiscal Multipliers? 2013), who point out that key country-specific characteristics such as trade openness and the exchange rate regime are determinant in the relationship between public investment and output.

Keywords: economic activity; federal public investment; long-term equilibrium relationship (search for similar items in EconPapers)
JEL-codes: C32 H54 N16 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
Working Paper: Public investment and economic activity in Mexico, 1925-1981 (2019) Downloads
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

Economics - The Open-Access, Open-Assessment E-Journal (2007-2020) is currently edited by Dennis J. Snower

More articles in Economics - The Open-Access, Open-Assessment E-Journal (2007-2020) from Kiel Institute for the World Economy (IfW Kiel) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

Page updated 2023-05-17
Handle: RePEc:zbw:ifweej:20206