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Public investment in transportation infrastructure and economic performance in Portugal
- Source :
- Repositório Científico de Acesso Aberto de Portugal, Repositório Científico de Acesso Aberto de Portugal (RCAAP), instacron:RCAAP
- Publication Year :
- 2005
- Publisher :
- Wiley, 2005.
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Abstract
- In this paper, we use a VAR approach to investigate the effects of public investment in transportation infrastructures on private investment, employment, and output in Portugal. Estimation results suggest that public investment crowds in private investment and employment, and has a strong positive effect on output. We estimate that one euro in public investment increases output in the long-term by 9.5 euros, which corresponds to a rate of return of 15.9%. These figures imply that there are strong long-term budgetary benefits from public investment in the form of increased future tax revenues. A closer look at the effects of different types of public investment uncovers the same general patterns. These results are very important from a public policy perspective. They suggest that the strategy followed by the Portuguese authorities of investing in public infrastructures is justified, both from a long-term development perspective and a long-term public budgetary perspective.
- Subjects :
- Finance
Rate of return
Public economics
Economic Performance
business.industry
Investment strategy
Geography, Planning and Development
Gross private domestic investment
Development
Investment (macroeconomics)
Private investment in public equity
Return on investment
Economics
Umbrella fund
Open-ended investment company
business
Public investment
Subjects
Details
- Language :
- English
- Database :
- OpenAIRE
- Journal :
- Repositório Científico de Acesso Aberto de Portugal, Repositório Científico de Acesso Aberto de Portugal (RCAAP), instacron:RCAAP
- Accession number :
- edsair.doi.dedup.....e2dd9dbc64b35c0d628b282bbbc4e730