potential effects of scaling up infrastructure in peru a general equilibrium model based analysis this study assesses and compares the potential economic impacts of different investment plans dedicated to filling infrastructure gaps in peru using a national database at the firm level we start

policy watch infrastructure investment and economic growth in the late 1980s david aschauer 1989 triggered a long overdue dialogue among economists and political leaders when he published a study arguing that much of the decline in u s productivity that occurred in the 1970s was precipitated by declining rates of public capital investment my own work confirmed these results munnell 1990a spending advocates seized on these findings as support for increased public investment the enthusiasm among policymakers for the early aschauer results was matched if not surpassed by skepticism on the part of many economists critics of these studies charged that the methodology was flawed that the direction of causation between public investment and output growth is unclear and that even if the historical empirical relationships were estimated correctly they provide no clear indications for current policy who s right what do we know and not know about the link between public infrastructure and productivity and what are the implications of these results for policy

public infrastructure investments productivity and welfare in fixed geographic areas abstract measures of the value of public investments are critical inputs into the policy process and aggregate production and cost functions have become the dominant methods of evaluating these benefits this paper examines the limitations of these approaches in light of applied production and spatial equilibrium theories a spatial equilibrium model of an economy with nontraded localized public goods like infrastructure is proposed and a method for identifying the role of public capital in firm production and household preferences is derived empirical evidence from a sample of large us cities suggests that public capital provides significant marginal benefits but the marginal productivity of public capital is low and aggregate city willingness to pay for large increases in public capital is less than their cost the paper concludes with a brief discussion of the political economy of urban infrastructure investment

railways and the local economy evidence from qingzang railway abstractthis article empirically examines the causal effect of railway infrastructure on local economic development using the construction of qingzang railway as a natural experiment we apply the difference in difference method and find that the qingzang railway significantly stimulated the economy of the counties along its path railway counties the local gdp per capita increased by about 33 after the railway had begun to operate the effect manifested primarily through the positive railway effect on the manufacturing industry in addition the effect did not vary significantly with the initial economic status of the railway counties the gdp per capita of the off railway counties that are adjacent to the railway counties was not significantly affected

exogenous oil shocks fiscal policy and sector reallocations in oil producing countries abstract previous literature has suggested that different mechanisms of transmission of exogenous oil shocks are responsible for the negative effects on the economic performances of oil exporting countries this paper aims at providing further evidence on the role of sectoral reallocation between private and public sectors in explaining the impact of shocks to oil revenues on the economic growth rates of major oil producing countries namely the gcc gulf corporation council countries the effects of oil shocks and expansionary fiscal policy on the business cycle of oil producing countries are examined the possibility to distinguish between various components of public sector spending policy that is purchases of consumption goods investments in productive activities and compensation for public employees is in particular allowed for a real business cycle rbc model is calibrated to fit the data on an average oil producing country results from the simulation of the theoretical model suggest that the possibility that the expansion of the size of the government due in particular to the increase in the number of employees can explain a large fraction of the negative effects of shocks to oil revenues on the private sector of the economy however since the growth in size of the public sector more than compensate for the reduction in size of the private sector an increase in oil revenues has the effect to boost total output

spatial variations in new manufacturing plant openings some empirical evidence from greece fotopoulos g and spence n 1999 spatial variations in new manufacturing plant openings some empirical evidence from greece reg studies 33 219 229 this research deals with the determinants of regional variation in new plant openings in greek manufacturing industries over the period 1980 91 key findings of this first detailed attempt to do so in a greek context relate to the significant direct effects of regional specialization the extent of local production links and investment in public infrastructure on new manufacturing activity confirming research findings in other countries the results obtained here indicate small firm presence the local supply of skilled labour and wealth and labour productivity differentials across regions to be significant and positive influences on new firm formation fotopoulos g et spence n 1999 la variation geographique de la creation d entreprises industrielles quelques preuves empiriques provenant de la grece reg studies 33 219 229 cet article traite

institutions infrastructure and economic growth abstract this paper develops a structural model of infrastructure and output growth that takes account of institutional and economic factors that mediate in the infrastructure gdp interactions cross country estimates of the model indicate that the contribution of infrastructure services to gdp is substantial and in general exceeds the cost of provision of those services the results also shed light on the factors that shape a country s response to its infrastructure needs and offer policy implications for facilitating the removal of infrastructure inadequacies

aggregate production functions interregional equilibrium and the measurement of infrastructure productivity abstract recent studies examined the role of public goods in aggregate production functions with a variety of results but the relationship between public goods and aggregate output depends on a complex set of price effects which are absent from aggregate production function analyses these cannot generally uncover the role of public goods in production even costless increases in public goods that are productive for individual firms will not always result in higher equilibrium output further increases in public goods that have zero marginal productivities will increase aggregate output under very plausible conditions a simple example demonstrates the quantitative importance of the results

co2 stabilization may be a no regrets policy restricting co2 emissions requires changing today s consumption pattern away from energy and emission intensive commodities towards cleaner goods the cost of stabilizing co2 emissions at the 1990 level by the year 2000 say as compared to a business as usual trend is estimated by several researchers to be on the order of 1 of gnp we will argue that the cost may be overestimated because of a too simple model describing the working of the economic system and the evaluation of welfare we demonstrate that by expanding a model to include the actual tax system and negative externalities the cost to present generations from restricting emissions by a co2 tax may be negative that is some reduction may actually correspond to a no regrets policy the reasons are inefficiencies in today s tax system and non optimal handling of negative externalities our analysis suggests that a co2 tax and reduced emissions will lessen such inefficiencies

infrastructures and productivity in the spanish regions mas m maudos j perez f and uriel e 1996 infrastructures and productivity in the spanish regions reg studies 30 641 649 the aim of this paper is to analyse the role of public capital the types of infrastructures in which it is invested and their territorial distribution in the gains in productivity of the private sector in the spanish regions in the period 1964 91 using panel data techniques to control for unobserved state specific characteristics the results obtained show how the infrastructures most directly linked to the productive process present a significant and positive effect on productivity they also show the importance of the network effect of the infrastructures of a productive nature as well as a decrease in the elasticity associated with such infrastructures as development progresses mas m maudos j perez f et uriel e 1996 les infrastructures et la productivite aux regions espagnoles reg studies 30 641 649 cet article cherche a analyser le role du capital public les

environmental taxation and unemployment some evidence on the double dividend hypothesis in europe abstract the employment double dividend hypothesis suggests that an appropriately designed fiscal reform in which emission charges are used to subsidize employers social security contributions may realize at least two relevant policy goals a better quality of the environment and at the same time an increase in employment levels this paper uses a newly developed econometric general equilibrium model for the european union as well as for each member country and presents simulation results up to the year 2010 of the effects of a european carbon tax the revenues from which are recycled to reduce employers social security contributions the results show that recycling carbon tax revenues may provide an employment double dividend only in the short run

linking local business with global growth opportunities the role of infrastructure infrastructure is instrumental when it comes to linking local businesses with their global growth opportunities this paper shows that by making this link the transport network can act as a catalyst for regional economic growth using a novel approach we find that firms in regions with a more developed transport infrastructure are better placed to benefit from positive growth opportunities than those in regions with a less well developed transport network this advantage is most pronounced in times of economic slack making a better transport network a key ingredient for economic recovery it is against this background that the recent slowdown in infrastructure investment in europe is worrisome but it is through this channel among others that the substantial ramp up of activity by the european investment bank is expected to foster growth and enhance competitiveness in europe

transportation infrastructure investment growth and international trade in turkey investment in transportation infrastructure facilitate the movement of the goods leading to higher standards of living for the people of the whole globe although infrastructure is indispensable to achieve the main development targets in developing countries such as urbanization industrialization and sustainable economic development kim 2006 the relationship between infrastructure expenditures economic growth and international trade is inconclusive the aim of this study is to investigate the effect of investment on highway infrastructure on international trade and economic growth in turkey for the period of 1970 to 2005 the empirical results from causality and cointegration analysis suggest only a very weak short run effect of share of exports in gross national product gnp on highway transportation expenditures but no long run relationships between highway infrastructure expenditures economic growth and international trade in turkey

effects of carbon taxes in an economy with prior tax distortions an intertemporal general equilibrium analysis abstract this paper analyzes the costs of carbon taxes in a model that recognizes interactions between this tax and pre existing taxes first we examine the extent to which costs of a u s carbon tax are reduced when its revenues finance cuts in income taxes such use of revenues significantly reduces but does not eliminate the overall policy costs the positive overall costs reflect the carbon tax s focus on intermediate inputs and its relatively narrow base in comparison with income taxes we also examine the sensitivity of the carbon tax s costs to the level of pre existing taxes for any given use of revenues welfare costs rise significantly with pre existing tax rates indicating that models disregarding pre existing taxes may substantially understate the costs of new environmental tax initiatives

filling potholes macroeconomic effects of maintenance versus new investments in public infrastructure abstract the maintenance of existing public infrastructure has often been neglected in favor of building new infrastructure in developing countries this paper develops a dynamic general equilibrium model that analyzes the reasons and effects of such neglect first the optimal level of maintenance is shown to depend on the size of new investments as a share of existing public infrastructure and on the productivity of infrastructure second the model is parameterized and solved numerically for a sample of latin american countries quantitative results show that reallocating funds from new infrastructure to maintenance can have positive effects on these countries gdp

the politics of infrastructure a number of recent studies attempt to measure the productivity of public capital some estimates indicate that government investments are a potential well spring for economic progress while others indicate that public infrastructure has a negligible effect on private sector output this article investigates political institutions and processes underlying the decisions for public infrastructure spending we apply the framework of strategic models of fiscal policy and develop an empirical model to analyze the substantial differences in public capital across american states institutions such as term limits citizen initiative and budgeting procedures were significant determinants of state public capital stocks and the flow of new public investments during the 1980s the results further suggest that political conditions such as legislative stability and voter volatility are systematically related to infrastructure differences across states

ict and transport infrastructure development an empirical analysis of complementarity abstractthis paper provides an empirical framework to assess the nonlinear complementary linkage effects that arise from the interaction between motorway capital and information and communications

public infrastructure and wages public capital s role as a productive input and household amenity production function studies typically conclude that public capital plays little role in enhancing productivity however others have found that infrastructure and employment growth are positively related these apparently conflicting results can be reconciled if public capital serves as a household amenity that increases labor supply without dramatically increasing productivity this study examines the impact of public capital on wages in order to assess whether productivity or amenity effects dominate for the economy as a whole the results suggest that highway s strongest role is as a household amenity however for the manufacturing sector the productivity effect of highways appears to dominate

infrastructural investment in long run economic growth south africa 1875 2001 summary productive public expenditure in the area of infrastructure such as roads transportation and housing can play an important role in promoting economic growth and encouraging private investment developments in endogenous growth theory introduce the possibility of a productive role for public expenditure this paper seeks to explain the relationship between investment in economic infrastructure and long run economic growth by examining the experience of south africa in a time series context the main findings that emerge from our examination of economic growth and economic infrastructure in south africa may be summarized as follows investment in infrastructure does appear to lead economic growth in south africa and does so both directly and indirectly the latter by raising the marginal productivity of capital there is weak evidence of feedback from output to infrastructure while the finding of an infrastructure growth impact is robust

whom do high growth firms hire we study employment and new hires among high growth firms hgfs in the swedish knowledge intensive sectors 1999 2002 using matched employer employee data we find that hgfs are more likely to emp

the contribution of local public infrastructure to private productivity and its political economy evidence from a panel of large german cities this paper proposes a simultaneous equation approach to theestimation of the contribution of infrastructure accumulationto private production a political economy model for theallocation of public infrastructure investment grants isformulated our empirical findings using a panel of largegerman cities for the years 1980 1986 and 1988 suggest thatcities ruled by a council sharing the state bundesland government s current political affiliation were particularlysuccessful in attracting infrastructure investment grants with regard to the contribution of infrastructure accumulationto growth we find that public capital is a significant factorin private production moreover at least for the samplestudied we find that simultaneity between output and publiccapital is weak thus feedback effects from output toinfrastructure are negligible

spillovers from high growth firms evidence from hungary how do high growth firms hgfs affect the rest of the economy we explore this question using hungarian administrative microdata relying on the birch definition of hgfs we find evidence for stronger productivity growth for firms operating in industries with more hgfs and for firms supplying industries with more hgfs knowledge spillovers or the surge of hgfs demand for intermediate inputs could explain these positive associations firms with intermediate productivity levels seem most likely to benefit from this effect while we find no differences by age or export status the results hold irrespective of the level of spatial aggregation and are robust to alternative definitions of hgfs as well as different measures of productivity or spillover

is all public capital created equal this paper uses a var approach to investigate the effects of public investment on private sector performance in the united states this approach is consistent with the argument that the analysis of

recursos naturales diversificacion y crecimiento regional en el peru based upon the export product space this paper shows the main features of the export product composition of peru and its regions with respect to export baskets these include a high con centration in few commodities a relatively low degree of similarity between products relatively high levels of productivity at the international level and enormous undiscovered or untapped export potential in addition this paper analyzes the hypothesis that the natural resource curse affects regional growth employment and export diversification subject to the limitations of the data and the heterogeneous panel methods employed estimation results indicate that the share of natural capital out of the total tangible wealth and natural capital per capita seems on average and in a relatively statistically robust way to spur growth primary employment and export concentration in a few products consequently the natural resource curse for the peruvian regions is not about growth but about low regional development since such resources do not have a significant impact on secondary and tertiary employment or on export product diversification

public capital and total factor productivity new evidence from the italian regions 1970 98 destefanis s and sena v 2005 public capital and total factor productivity new evidence from the italian regions 1970 98 regional studies 39 603 618 this paper analyses the relationship between industrial total factor productivity and public capital across the 20 italian administrative regions it adds upon the existing literature in a number of ways it analyses a longer period 1970 98 it allows for the role of human capital accumulation it tests for the existence of a long run relationship between total factor productivity and public capital through previously suggested panel techniques and for weak exogeneity of public capital and it assesses the significance of public capital within a non parametric set up based on the free disposal hull the results confirm that public capital has a significant impact on the evolution of total factor productivity particularly in the southern regions this impact is mainly ascribed to the core infrastructures road and airports harbours railroads w

empirical studies on the relationship between public and private investment and gdp growth this study performs empirical studies on the interaction between public and private investment and gdp growth for japan and the usa since the data for each country used show features that are quite different from each other empirical methods of gmm generalized method of moments and ols ordinary least squares are accordingly applied to japan and the usa respectively the empirical results suggest that both public and private investment make great contributions to japanese economic growth while the us private investment seems to play a much more significant role than public investment

a comparative analysis of funding schemes for public infrastructure spending in quebec the economic literature has been investigating the positive relation between public infrastructure spending and the productivity of the private sector since munnell 1992 we have introduced this relationship into a recursive dynamic computable general equilibrium model of the quebec economy to investigate various funding schemes to scale up infrastructure spending in the province we draw our assumptions from estache et al 2010 combined with sectoral elasticity parameters we conduct a comparative analysis where the funding comes from debt alone and debt with sales tax income tax and business tax our main finding is that the income tax seems to produce the most positive effects and the businesses tax the most negative effects though differences are small

crowding out the role of state companies and the dynamics of industrial competitiveness in india this article examines growth patterns of government companies in india whether their presence has crowded out private entrepreneurial activity and whether there has been a decline in the competitiveness of india s industry measured as relative productive efficiency for a 45 year period from 1957 1958 to 2001 2002 there was a significant growth in the number of government companies in india that effectively crowded out the entry and growth of private enterprise this took place from the mid to late 1950s to the late 1980s and early 1990s correspondingly the amount of private equity capital invested in firms declined until the late 1980s and early 1990s when there was an upsurge of private investment activity another feature was that a small number of government companies absorbed most of the corporate sector equity investment in india the growth in the share of government companies in india that crowded out the entry and growth of private enterprises has had a significantly negative effect on india s industrial competitiveness after the introduction of reforms in 1991 there has been a significant crowding in by private enterprises displacing the government companies from their key position as holders of a very large portion of equity capital and also reversing the trend in the decline of competitiveness of indian industry as a whole copyright 2009 oxford university press

high growth firms introduction to the special section high growth firms hgfs have attracted considerable attention recently as academics and policymakers have increasingly recognized the highly skewed nature of many metrics of firm performance a small number of hgfs drives a disproportionately large amount of job creation while the average firm has a limited impact on the economy this article explores the reasons for this increased interest summarizes the existing literature and highlights the methodological considerations that constrain and bias research this special section draws attention to the importance of hgfs for future industrial performance explores their unusual growth trajectories and strategies and highlights the lack of persistence of high growth consequently while hgfs are important for understanding the economy and developing public policy they are unlikely to be useful vehicles for public policy given the difficulties involved in predicting which firms will grow the lack of persistence in high growth levels and the complex and often indirect relationship between firm capability high growth and macro economic performance

how productive is infrastructure a new approach and evidence from rural india there have been competing arguments about the effect of public infrastructure on productivity level based and debate based regressions often lead to different estimates to help reconcile this difference this article applies the gmm method to first test for causality to check for length of lagged relationships and the existence of reverse causality before specifying a final model and deciding the estimation procedure this approach is illustrated using a panel data set for india the results show that infrastructure development in india is productive providing supporting evidence to reverse the trend of declining investment in rural infrastructure

mobile telecommunications and the impact on economic development using annual data from 192 countries over the period 1990 2007 we assess the impact of mobile telecommunications on economic growth we find that this impact is smaller for countries with a low mobile penetration usually low income countries while in low income countries the mobile telecommunications contribution to annual gdp growth is 0 11 for high income countries this is 0 20 the increasing returns from mobile adoption are also emerging when assessing the impact on productivity growth to promote mobile telecommunications penetration liberalization policies along with appropriate regulatory frameworks are recommended such policies should be pursued more forcefully in cases where serious shortcomings exist harald gruber and pantelis koutroumpis

public investment and regional inequality in rural china this paper develops a method for decomposing the contributions of various types of public investment to regional inequality and applies the method to rural china public investments are found to have contributed to production growth in both the agricultural and rural non agricultural sectors but their contributions to regional inequality have differed by type of investment and the region in which they are made all types of investment in the least developed western region reduce regional inequality whereas additional investments in the coastal and central regions worsen regional inequality investments in rural education and agricultural r d in the western region have the largest and most favorable impacts on reducing regional inequality

economic growth regressions for the american states a sensitivity analysis i introduction researchers motivated by a variety of questions turn to data on the economic performance of the american states to analyze their ideas empirically the appeal of cross state empirical analysis derives from the fact that while states differ in relevant dimensions they are not so different as to make omitted variables an overwhelming source of error for example the state economies operate under the same monetary regime the federal reserve comparable legal institutions the u s constitution and borders open to the flow of productive factors knowledge and products cross state analysis avoids the myriad structural differences that encumber cross national empirical analysis thus investigators feel secure in considering a relatively small number of control variables in attempting to establish a statistical relationship between state economic performance and a particular variable of interest the availability of uniform and accurate time series data for the states adds to the appeal of cross state regression models despite the advantages associated with evaluating institutionally similar economies researchers who rely on state regressions find little systematic guidance concerning which variables to include and other basic specification issues for instance do demographic and geographic characteristics vary sufficiently across states to require independent controls do cultural or climatic conditions affect growth or are these variables correlated with other factors that may affect growth such as labor force participation rates or education levels a review of the extensive literature reveals that few studies control for the variables analyzed by other researchers these specification differences make it hard to evaluate and compare the results of existing studies bartik 1991 and phillips and goss 1995 illustrate this problem as they attempt to garner the effect of taxes on state economic development from dozens of studies that employ alternative specifications and methodologies they use meta regression analysis mra to test whether specification changes and alternative variables significantly affect the estimated elasticity of state growth with respect to taxes the mra technique focuses on the sensitivity of the estimated coefficients for state tax variables to model variation in this paper we employ a technique to assess the sensitivity of numerous control variables identified in the state growth literature we also introduce several new control variables the approach identifies which variables are robust to small changes in the conditioning information set our procedure closely follows that in levine and renelt 1992 which for its part relies on the extreme bounds analysis eba suggested by learner 1983 1985 1 the main difference is that we employ annual panel data on the american states pooling cross sectional and time series data whereas levine and renelt employ cross country data averaged over 20 year or even longer time intervals the cross country studies such as those assessed in levine and renelt that average long time periods generally seek to identify factors associated with long run steady state growth the u s state studies using annual panel data do not share a comparable unifying purpose relationships estimated from yearly data reveal short term responses and pick up business cycle effects which confounds drawing implications about growth theory with this qualification in mind the results presented below indicate which variables included in past studies are robust and provide a set of core variables as a starting point for future research that relies on state growth regressions and annual panel data finally the findings demonstrate that several important conclusions in the literature depend on how variables are measured for example the relationship between state growth and government size reverses sign depending on whether we denominate government size in per capita terms or as a share of state income

telecommunications infrastructure and economic development a simultaneous approach in diesem beitrag wird untersucht welchen einflus die telekommunikations infrastruktur auf die wirtschaftliche entwicklung ausubt diese wichtige frage hat im zusammenhang mit der diskussion um informationsautobahnen aktualitat erlangt in der vorliegenden studie wird der einflus der telekommunikations infrastruktur fur 21 oecdlander fur die vergangenen 20 jahre analysiert es wird ein strukturgleichungsmodell geschatzt in dem investitionen in die telekommunikations infrastruktur als endogene variable erfast werden und in einem mikromodell angebot und nachfrage nach telekommunikations investitionen spezifiziert werden das mikromodell wird dann zusammen mit der makro wachstumsgleichung geschatzt als ergebnis stellen die autoren dann eine positive kausalbeziehung zwischen telekommunikations investitionen und wirtschaftlicher entwicklung fest wenn eine kritische masse an telekommunikations infrastruktur existiert

is public capital really productive a methodological reappraisal abstract we present an evaluation of the main empirical approaches used in the literature to estimate the contribution of public capital stock to growth and private factors productivity based on a simple stochastic general equilibrium model built as to reproduce the main long run relations observed in us post war historical data we show that the production function approach may not be reliable to estimate this contribution our analysis reveals that this approach largely overestimates the public capital elasticity given the presence of a common stochastic trend shared by all non stationary inputs

optimal co investment in supply chain infrastructure abstract this paper considers co investment in a supply chain infrastructure using an inter temporal model we assume that firms capital is essentially the supply chain s infrastructure as a result firms policies consist in selecting an optimal level of employment as well as the level of co investment in the supply chain infrastructure several applications and examples are presented and open loop as well as feedback solutions are found for non cooperating firms long and short run investment cooperation and non simultaneous moves stackelberg firms in particular we show that a solution based on nash and stackelberg differential games provides the same level of capital investment thus selecting the leader and the follower in a co investment program does not matter we show that in general co investments by firms vary both over time and across firms and thereby render difficult the implementation of co investment programs for future capital development to overcome this problem we derive conditions for firms investment share to remain unchanged over time and thus be easily planned

economic development as self discovery in the presence of uncertainty about what a country can be good at producing there can be great social value to discovering costs of domestic activities because such discoveries can be easily imitated we develop a general equilibrium framework for a small open economy to clarify the analytical and normative issues we highlight two failures of the laissez faire outcome there is too little investment and entrepreneurship ex ante and too much production diversification ex post optimal policy consists of counteracting these distortions to encourage investments in the modern sector ex ante but to rationalize production ex post we provide some informal evidence on the building blocks of our model

sustainable infrastructure investment with labor only production abstract the purpose of this paper is to consider a partial equilibrium model for a sustainable infrastructure investment in a labor production economy we consider an inter temporal stackelberg game in a capital primitive economy where all capital investments are made by a central agency a government the government is assumed to have a number of objectives including sustainability of the infrastructure investments while firms are assumed to be myopic maximizing only current profits and paying taxes as a function of their returns both open loop and closed loop feedback stackelberg strategies are considered based on the analysis of the investment game some conclusions are drawn regarding the propensity to invest as a function of sustainability constraints the taxation rates and employment levels we then show that investments can tend to a constant level and thus strategic government goals of sustainability and employment growth can be planned only if labor costs and the general price index are steady or characterized by a set of conditions ensuring the attainability of the steady state investment

marshall s scale economies and jacobs externality in korea the role of age size and the legal form of organisation of establishments this paper revisits the concept of agglomeration economies by estimating the effects of localisation urbanisation and local competition on labour productivity using establish ment level data in korean manufacturing industries it is found that when an establish ment locates in a more localised specialised more urbanised diversified and more competitive area its workers become more productive due to external benefits from agglomeration issues of self selection bias and omitted variable bias are addressed by instrumenting the variables measuring localisation economies and controlling for the fixed effects of establishments location and industries year however the external effects from the spatial proximity of other establishments vary across the categories of industry type age size and legal form of organisation of establishments establishments in traditional heavy manufacturing industries receive more external benefits in a less diversified area while those in transport equipment manufacturing industries enjoy the largest benefits from localisation externalities exist for establishments aged between 2 and 7 years having at least 10 workers being corporate and having multiplants or not being headquarters establishments in relatively young industries rely more on diver sified environments while establishments in relatively old industries receive greater external benefits in the same industry cluster this result supports the product life cycle location theory of duranton and puga

is public expenditure productive abstract this paper considers the relationship between aggregate productivity and stock and flow government spending variables the empirical results indicate that i the nonmilitary public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending ii military capital bears little relation to productivity and iii a core infrastructure of streets highways airports mass transit sewers water systems etc has most explanatory power for productivity the paper also suggests an important role for the net public capital stock in the productivity slowdown of the last fifteen years

political parties and the supply side of the economy the provision of physical and human capital in advanced economies 1960 90 theory partisan tenure of government in contrast to institutionalist and structural approaches is used to explain the nature of governmental strategies to affect the supply side of the economy the provision of the input factors capital and labor hypotheses supply side economic strategies are a function of the party in office left wing governments spend heavily in physical and human capital formation to raise the productivity of factors and the competitiveness of the economy rightwing governments rely instead on private agents to maximize economic growth the organization of the domestic political economy and the international economy which place heavy limits on the capacity of parties to affect the conduct of macroeconomic policies hardly constrain the choice of supply side economic strategies methods regression analysis of data for levels of public spending on gross fixed capital formation and on education in oecd nations from 1960 to 1990 results supply side policies conform to partisan preferences throughout the period examined the institutional configuration of the economy affected policies jointly with government partisanship until the oil shock but not afterwards economic openness does not constrain the choice of supply side policies

public capital accumulation and private sector performance abstract this paper analyzes the effects of public capital on private sector variables in a vector auto regressive framework empirical results suggest first that public capital follows a policy rule that relates public capital positively with lagged output and negatively with lagged employment second public capital crowds in private capital while the long term effects on employment are only marginally positive finally a one dollar increase in public capital increases private output in the long term by 65 cents accordingly while public capital is productive its effects on output are much lower than claimed in the previous literature

dots to boxes do the size and shape of spatial units jeopardize economic geography estimations this paper evaluates in the context of economic geography estimates the magnitude of the distortions arising from the choice of zoning system which is also known as the modifiable areal unit problem maup we consider three standard economic geography exercises the analysis of spatial concentration agglomeration economies and trade determinants using various french zoning systems differentiated according to the size and shape of spatial units which are the two main determinants of the maup while size matters a little shape does so much less both dimensions seem to be of secondary importance compared to specification issues

on the optimality of public capital for long run economic growth evidence from panel data the role of public capital in economic growth is examined using data from the penn world tables and other sources on a large number of countries drawing on intertemporal optimization the theoretical framework nests the exogenous solow and endogenous types of growth and is data consistent it is found that public capital makes a significant contribution to growth the actual level of investment on public capital is suboptimal growth in recent decades can be characterized as endogenous with little sign of convergence there is evidence of a growth slow down between the 1970s and 1980s human capital also significantly enhances growth

productive efficiency and growth policies for the caribbean productive economic efficiency and factors affecting it was evaluated in the caribbean between 1983 to 1992 results from non parametric programming indicated that efficiency i e pure technical allocative and economic measures were lower and more variable in caribbean than in other western hemisphere countries i e north america and latin america tobit regression analysis indicated higher levels of private and foreign investments productive infrastructure credit availability education level and consumption of domestically produced goods had positive impacts on the efficiency measures on the other hand higher levels of public expenditure income tax and export taxes and higher inflation rates had negative effects these results support the current trend towards advocating more open economies i e letting the free market work and encouraging governments to confine their functions to facilitative regulatory type roles and to undertaking tasks that are not generally undertaken by the privat

efficiency adjusted public capital and growth summary this paper constructs an efficiency adjusted public capital stock series and re examines the public capital and growth relationship the paper also examines the effects of four specific stages of the public investment process appraisal selection implementation and evaluation on capital accumulation and growth the results show that public capital is a significant contributor to economic growth the quality of public investment as measured by variables capturing the adequacy of project selection and implementation is statistically significant in explaining variations in economic growth a result mainly driven by low income countries

airline traffic and urban economic development this paper provides new evidence on the link between airline traffic and employment in us metropolitan areas the evidence confirms the common view that good airline service is an important factor in urban economic development frequent service to a variety of destinations reflected in a high level of passenger enplanements facilitates easy face to face contact with businesses in other cities attracting new firms to the metro area and stimulating employment at established enterprises the empirical results show that a 10 per cent increase in passenger enplanements in a metro area leads approximately to a 1 per cent increase in employment in service related industries however airline traffic has no effect on manufacturing and other goods related employment suggesting that air travel is less important for such firms than for service related businesses these estimates are generated controlling for reverse causality between employment and traffic the results imply that expansion of chicago s o hare ai

developing by borrowing inter jurisdictional competition land finance and local debt accumulation in china although the investment oriented development model for economic growth adopted by chinese governments has generated spectacular results the risks of debt financed urbanisation and economic development have recently become evident in mounting local debts that are undermining the financial system triggering concerns with respect to local governments indebtedness financial stability and sovereign risk in china in this paper we portray the uneven spatial and temporal dynamics of local government debt in china and examine the ways in which it is intertwined with institutional political and economic factors our analysis shows that while global and national economic conditions have resulted in a dramatic increase in local government debt particularly in the late 2000s and the early 2010s the spatial variation of local debt accumulation in china could be partly explained by two institutional factors land finance and inter jurisdictional competition we argue that the behaviour of local governments may

public capital stock and economic growth an analysis of the spanish economy the objective of this paper is to evaluate the short and long term effects of public investment in infrastructure on aggregate output labour and capital formation in the private sector the problem is analysed in a dynamic multivariate framework which allows for explicit consideration of feedback among all the variables this approach generalizes the current literature which relies on a single equation model to estimate production functions and implicitly assumes the absence of feedback relationships for the spanish economy our results suggest positive long term effects of public investment on the private sector variables

productiveness and welfare implications of public infrastructure a dynamic two sector general equilibrium analysis abstract this paper develops a dynamic general equilibrium model that provides an internally consistent micro foundations framework where various effects of infrastructure policy changes can be studied devoting additional resources to infrastructure investment can payoff in terms of sizable increases in gdp and private investment in addition to this the model also makes predictions concerning changes in the welfare of agents resulting from additional infrastructure investment specific policy recommendations that attain highest welfare gains are computed the recommendation is that on average an additional 4 of gdp per year should be devoted to public investment in the latin american countries in the sample

services sector and economic growth in india this study examines the long run equilibrium and short run dynamic relationship between services sector and gross domestic product gdp and between services and nonservices sectors in india the model is estimated using the optimal single equation and the maximum likelihood system estimators all the estimators consistently suggest the cointegrating relationship between services sector and gdp as well as between services and nonservices sectors the estimates of long run elasticity parameters are statistically significant and dimensionally consistent across the estimators the conventional cumulative sum cusum and the new cusum and moving sum mosum tests suggest the stability of the equilibrium residuals and reinforce the cointegrating relationship between the model series the error correction model provides some support for unidirectional granger causality from services sector to gdp the impulse response and variance decomposition analyses instead suggest the bidirectional causality between servic

minimum wage and tax evasion theory and evidence the paper investigates the role of the minimum wage in a competitive economy in which there is underreporting of earnings by employed labour the minimum wage induces higher compliance by some lowproductivity workers and transforms a nominally neutral scal system into a regressive one a spike in the wage distribution at the minimum wage level appears and a positive correlation between the size of the spike and the size of the informal economy is predicted and documented using cross country data for europe a further result is that employees whose o cially declared earnings appear to be boosted by a minimum wage hike actually experience a decline in their true income this prediction nds support in an empirical test using the massive increase in the minimum wage that took place in hungary in 2001 as a quasi natural experiment

spillover effects of public capital formation evidence from the spanish regions maybe because of the inconclusive nature of the results on the impact of public capital on output at the regional level the issue of the po ssible existence of the regional spillovers from public capital formation has received little attention the objective of this paper is to provide evidence on the possible existence of such spillovers we consider the case of spain and its seventeen regions our methodological approach consists in estimating an aggregate var model for spain as well as seventeen region specific var models in which both capital installed in the region and capital installed outside the region are allowed to play a role in en hancing regional output the estimation results can be summarized as follows the aggregate effects of public capital formation in spain are important they cannot however be captured in their entirety by the direct effects in each region from public capital installed in the region itself when for each region both the capital installed in the region and the capital installed outside the region are considered the total disaggregated effect from the seventeen regional models are very much in line with the aggregate results furthermore the aggregate effect seems to be due in almost equal parts to the direct and spillover effects of public capital formation ultimately this paper establishes the relevance of both capital installed in each region and s pillover effects in the understanding of the regional decomposition of the aggregate effects of public capital formation in doing so it opens the door to some tantalizing and potentially highly charged research issues in terms of the determination of the optimal location of public investment projects

public capital and private productivity this paper uses three different approaches to investigate whether the declining provision of public capital is a major cause of declining labor productivity the juxtaposition of approaches removes

public health capital and productivity in the spanish regions a dynamic panel data model abstract this paper investigates the impact of public health expenditure and variations in the composition of this expenditure on economic growth we develop an extension of the solow model that includes health as a publicly provided input in order to explain variations in productivity the paper reports the results of an empirical investigation using panel data for the spanish regions the results suggest that current government health spending has consistently positive effects while governmental investment in health care has no effect on productivity

what have we learned from three decades of research on the productivity of public capital the last three decades have witnessed a great deal of research effort devoted to measuring the private output elasticity of public capital the wide range of available estimates have precluded any consensus so far however this paper reconciles the empirical findings of the literature by quantitatively analyzing a sample of 578 estimates collected from 68 studies for the 1983 2008 period using meta regression analysis we show how study design characteristics and publication bias can explain a large fraction of the variation across estimates we find a short run output elasticity of public capital supplied at the central government level of 0 083 which increases to 0 122 in the long run if in addition only core infrastructure at a regional local level of government is considered these estimates are almost doubled the average output elasticity of public capital amounts to 0 106 our results suggest that public capital is undersupplied in oecd economies

the marginal efficiency effects of taxes and subsidies in the presence of externalities a computational general equilibrium approach abstract using 1983 data we develop a 19 sector computational general equilibrium model incorporating producer producer externalities and producer consumer externalities simulation results indicate that when additional government expenditure is financed by pigouvian taxes the marginal cost of public funds is substantially below one labor sales and output taxes also affect the output of the polluting industries and thus have indirect pigouvian effects which tend to reduce the associated marginal costs of public funds pigouvian taxes are usually more efficient than pigouvian subsidies since the tax revenue can be used to reduce other taxes