Modelling Government Investment and Economic Growth on a Macro Level: A Review

Public Infrastructure Investment, Costs, and Inter-State Spatial Spillovers in U.S. Manufacturing: 1982-96

“…This is very similar to the results found by Morrison and Schwartz (1996a,b), which might be expected since both are based on a cost-approach, although the current study is for a later -5.26 -7.36 -3.71 -6.55 -10.50 -4 Aschauer (1989). As documented in the survey by Sturm et al (1998), who note that dual cost or profit models typically generate elasticities about half the size of Aschauer's, this measure is also in the same range as most other studies based on this type of methodology.…”

“…Summaries of the literature by Gramlich (1994), Sturm and De Haan (1995) and Sturm et al (1998) suggest that many authors have found this productivity impact to be quite high. Aschauer's estimates suggested that public investment had a greater return to private sector economic performance than did private capital investment (Reich, 1991), while Deno (1988) estimated the impact to be even greater than that reported by Aschauer.…”

New Estimates of Government Net Capital Stocks for 22 OECD Countries 1960-2001

“…28 Multicollinearity among the regressors is frequently cited as a problem in the empirical literature estimating production functions and cost functions for individual countries (see the survey by Sturm, Kuper, and de Haan, 1998). An alternative way to deal with this problem is to exploit the cross-sectional dimension of the data and estimate panel data models instead of carrying out individual-country regressions.…”

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“…References Generalized Method of Moments as employed (Oraboune, 2008;Seetanah, 2012) Three log forms model with Fixed/random effects techniques (Ravallion and Datt, 1996;Datt and Ravallion, 2002;Ghura et al, 2002) Simultaneous equations Fan et al (2000) Neo-classical production functions such as Cobb-Douglas or log linear production function Fan et al (2004); (Munnell, 1992;Gramlich, 1994;Sturm et al, 1998;Romp and De-Haan, 2005) Simultaneous Equations (A) The Human Capital Channel, (B) The Market Access Channel, and (C) The Labor Activities Channel (Mustajab, 2009;Gachassin et al, 2010) Panel data and Dynamic Panel Analysis Seeanah et al (2009);Wooldridge (2002) Vector Autoregression (VAR) and Vector Error Correction Models (VECM) Perron (1990); Toda and Phillips (1993;1994); Dufour and Renault (1998);Ramirez (2004);Lütkepohl (2005) Structural Vector Autoregressive (SVAR) Sims (1980a;1980b); Amisano and Giannini (1997); Arellano and Bover (1995); Saikkonen and Lütkepohl (2002); Sarte (1997);Ogun (2010) In this study the impact of road infrastructure on Malawi's poverty is assessed from a macroeconomic perspective. The lack of clear theoretical guidance on the choice of regressors, for the poverty equation, leads to a wide set of possible specifications and model uncertainty which in turn often results in contradictory conclusions.…”