Sep 21, 2009

Articles in journals

Afonso, A., St. Aubyn, M.

77

18

Using annual data from 17 developed economies, we evaluate the macroeconomic effects of public and private investment through a five-variable VAR. From impulse response functions, we are able to assess the extent of crowding-in or crowding-out of both components of investment. We also compute the associated macroeconomic rates of return of public and private investment for each country. The results show the existence of positive effects of public investment and private investment on output. On the other hand, the crowding-in effects of public investment on private investment vary across countries, while the crowding-in effect of private investment on public investment is more generalised.

Fiscal policy,Private investment,Public investment,Impulse response,VAR,