Efficiency-Adjusted Public Capital and Growth

Gupta, Sanjeev; Kangur, Alvar; Papageorgiou, Chris; Wane, Abdoul Aziz

doi:10.1016/j.worlddev.2013.11.012

Cited by 153 publications

(110 citation statements)

References 33 publications

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“…Hurlin and Arestoff (2010) and Gupta et al (2011)). The 2-4 percent range is similar to the depreciation rate for government nonresidential structures in the U.S. (2-3 percent, Table C, Herman et al (2003)).…”

Section: Equilibrium Solution Method and Calibrationmentioning

confidence: 98%

Investing Volatile Oil Revenues in Capital-Scarce Economies: An Application to Angola

Richmond

Yackovlev²,

Yang³

2013

IMF Working Papers

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Natural resource revenues are an increasingly important financing source for public investment in many developing economies. Investing volatile resource revenues, however, may subject an economy to macroeconomic instability. This paper applies to Angola the fiscal framework developed in Berg et al. (forthcoming) that incorporates investment inefficiency and absorptive capacity constraints, often encountered in developing countries. The sustainable investing approach, which combines a stable fiscal regime with external savings, can convert resource wealth to development gains while maintaining economic stability. Stochastic simulations demonstrate how the framework can be used to inform allocations between capital spending and external savings when facing uncertain oil revenues. An overly aggressive investment scaling-up path could result in insufficient fiscal buffers when faced with negative oil price shocks. Consequently, investment progress can be interrupted, driving up the capital depreciation rate, undermining economic stability, and lowering the growth benefits of public investment. JEL Classification Numbers: Q32, E22, F43, O41

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Section: Equilibrium Solution Method and Calibrationmentioning

confidence: 98%

Investing Volatile Oil Revenues in Capital-Scarce Economies: An Application to Angola

Richmond

Yackovlev²,

Yang³

2013

IMF Working Papers

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“…Gupta et al (2014) and O'Toole and Tarp (2014) address the issue of public investment efficiency, mainly in the perspective of the development of low-income economies. The mentioned studies stress that measures of the adequacy of public investment projects are a statistically significant variable when explaining growth in developing countries.…”

Section: A Remark On the Empirics Of Project Quality And Investor's Smentioning

confidence: 99%

Optimal resource allocation in a representative investor economy

Gomes

2015

Economic Modelling

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The Ramsey-Cass-Koopmans neoclassical growth setup and the AK endogenous growth framework are two prototypes of a class of growth models where, by assumption, investment resources are always perfectly allocated to production. As a corollary, these models offer a partial view of the growth process circumscribed to a limit case, namely the most favorable case in which all possible frictions on the allocation of investment resources are absent. This paper adds to the conventional growth setup an optimal mechanism of assignment of investment resources that contemplates the possibility of inefficient allocation. In the assumed economy there is a single representative investor and a large number of firms that compete for the available resources. The new setup highlights how agency costs may deviate the economy from the benchmark growth outcome, potentially generating less desirable long-run results. The appeal of the proposed framework resides also on the fact that new determinants of growth emerge and take a leading role, namely the investor's sentiment and the quality of the firms' investment proposals.

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“…After it, several other studies appeared, such as Munnell's (1990) and Lynde and Richmond (1992). However, as Gupta et al (2014) state, the elasticities reported in this first wave of papers were questioned on the grounds that they were fraught with methodological and econometric problems (Gramlich 1994). The main problems were reverse causation from productivity to public capital, and spurious correlation due to non-stationarity of the data.…”

Section: Introductionmentioning

confidence: 99%

Effects of the hydraulic infrastructure on economic growth: evidence from Catalonia

Ventosa¹

2016

Sustain. Water Resour. Manag.

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Public infrastructure has a positive effect on labour productivity and growth. However, different types of infrastructure produce different magnitudes of effects. This article contains an analysis of the stock of hydraulic capital and investments in Catalonia and provides empirical evidence of its effect on productivity and growth. It also compares the magnitude of this effect with the magnitude of other types of public and private capital. The research shows that hydraulic capital and investments have a positive and significant effect on economic growth. However, this effect may be lower than that resulting from other forms of public or private capital.

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Efficiency-Adjusted Public Capital and Growth

Cited by 153 publications

References 33 publications

Investing Volatile Oil Revenues in Capital-Scarce Economies: An Application to Angola

Investing Volatile Oil Revenues in Capital-Scarce Economies: An Application to Angola

Optimal resource allocation in a representative investor economy

Effects of the hydraulic infrastructure on economic growth: evidence from Catalonia

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