Public Infrastructure Investments, Productivity and Welfare in Fixed Geographic Areas

Haughwout, Andrew F.

doi:10.2139/ssrn.933683

Cited by 32 publications

(45 citation statements)

References 35 publications

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“…Decreasing cost structures that lead to better capital stock attracts investments, private capital and resources, leading to higher output and income in the region (Egger & Falkinger 2003;Haughwout 2002). …”

Section: Previous Research On the Topicmentioning

confidence: 99%

The contribution of public capital towards economic growth: A KwaZulu-Natal case study

Coetzee¹,

Kleynhans²

2017

SAJEMS

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Background: The adequate supply of infrastructure is essential to ensure increasing productivity and economic growth. Research found this relationship to be significantly positive. The external effects that spending on public capital has on the production function of private firms stimulates economic growth overall. This implies that public capital inputs should be incorporated into the production function.Aim: The way provincial or regional growth depends on infrastructure is investigated in this article and it is applied to data from KwaZulu-Natal province, as an illustration.Setting: This study investigates the extent to which infrastructure in KwaZulu-Natal province in South Africa leads towards economic growth of the province.Methods: From a theoretical framework, this article develops an endogenous growth model, which investigates the association between provincial public capital stock expenditure and economic growth. Data series for public capital formation are first developed to apply in this study and others to follow. Econometric techniques are then employed, using quarterly data between 2001 and 2015, to assess the set hypothesis that growth in expenditure on public capital leads to national economic growth.Results: The empirical results support the argument of a positive relationship between provincial capital stock and economic growth in the long-term. The findings also suggests that the long-term causality or effect fades over time, albeit slowly.Conclusion: The nature and statistical significance of the long-term equilibrium relationship seems to be ambiguous at best. Some evidence of an equilibrium relationship in the short-term was, however, also observed. In conclusion, there also seems to be some causality between provincial capital stock and provincial gross domestic product in the short-run.

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Section: Previous Research On the Topicmentioning

confidence: 99%

The contribution of public capital towards economic growth: A KwaZulu-Natal case study

Coetzee¹,

Kleynhans²

2017

SAJEMS

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“…Question 2 refers to investment, which has a supply-side dimension as well because better public infrastructure makes firms more productive (e.g. Haughwout, 2002). More recently, higher public investment has often been strongly supported by left-of-center politicians and economists, as part of a demand-side policy.…”

Section: For Higher Economic Growth Of the Emu It Is Essential That Imentioning

confidence: 99%

European Monetary Union Reform Preferences of French and German Parliamentarians

et al. 2017

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Abstract: This study analyzes results from an original survey of members of the French and German parliaments (Assemblée Nationale, Sénat and Bundestag) on economic policies and institutions of the Eurozone. We find that French politicians are significantly more supportive of Eurobonds, a European unemployment insurance scheme, and an active monetary policy by the ECB than German politicians. At the same time, there are significant differences along party lines, which are often quantitatively more important than differences in nationality. Leftleaning members of parliaments are in favor of new policy instruments at the European or Eurozone level, but are skeptical about the fiscal constraints of the Fiscal Compact. There is widespread consensus across parties and countries that more investment at national levels is warranted.

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“…Aschauer (1989) was the first to assess the role of public investment in economic growth and productivity improvements. Since then, works have focused on exploring the links between infrastructure investment and macroeconomic variables such as GDP (Munnell, 1990;Holtz-Eakin, 1994;Gramlich, 1994 for a review literature), productivity growth (SACTRA, 1999;Haughwout, 2002) and employment (Vickerman, 2002, Dalemberg et al, 1998.…”

Section: Literature Reviewmentioning

confidence: 99%

Does high-speed rail generate spillovers on local budgets?

Hernández

Jiménez

2014

Transport Policy

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Many developed countries have boosted investment into High-Speed Rail (HSR).This infrastructure is costly and requires high investment during the construction and operation periods, which is mainly financed with public funds. This economic effort is seldom set off, which leads to subsidies with the money collected from public debt growth or tax pressure increases. The question that immediately emerges is whether the entrance of this new infrastructure generates spillovers at the local level. In this paper, we answer this question by using local data on economic activity, municipalities' characteristics and local public budgets in Spain for the past decade (2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010). To approach to this problem, we use GIS tools and build a database to estimate the impact by considering difference-in-difference analysis. Our estimations yield a general conclusion: when HSR comes to town, both local revenues and the local fiscal gap improve by 10% and 16%, respectively. These improvements primarily affect municipalities located within 5 km of an HSR station.

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Public Infrastructure Investments, Productivity and Welfare in Fixed Geographic Areas

Cited by 32 publications

References 35 publications

The contribution of public capital towards economic growth: A KwaZulu-Natal case study

The contribution of public capital towards economic growth: A KwaZulu-Natal case study

European Monetary Union Reform Preferences of French and German Parliamentarians

Does high-speed rail generate spillovers on local budgets?

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