IDEAS home Printed from https://ideas.repec.org/p/acb/cbeeco/2006-474.html
   My bibliography  Save this paper

Public Capital Spillovers and Growth: A Foray Downunder

Author

Listed:
  • Timothy Kam
  • Yi-Chia Wang

Abstract

We extend the deterministic growth model of Glomm and Ravikumar (1994) to a stochastic endogenous growth model which nests both exogenous and endogenous growth factors. By introducing simple shocks to production technology, private capital and public capital investment, we can derive testable time series properties of the analytical model. The hypothesis of strict endogenous growth due to public capital spillovers cannot be statistically rejected for our Australian data set. We find further short-run evidence of public capital contributing to permanent increases in the levels of per capita income and private capital.

Suggested Citation

  • Timothy Kam & Yi-Chia Wang, 2006. "Public Capital Spillovers and Growth: A Foray Downunder," ANU Working Papers in Economics and Econometrics 2006-474, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2006-474
    as

    Download full text from publisher

    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp474.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Aschauer, David Alan, 1989. "Does public capital crowd out private capital?," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 171-188, September.
    3. repec:bla:ecorec:v:73:y:1997:i:221:p:125-35 is not listed on IDEAS
    4. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    5. Hakkio, Craig S. & Rush, Mark, 1991. "Cointegration: how short is the long run?," Journal of International Money and Finance, Elsevier, vol. 10(4), pages 571-581, December.
    6. Glomm, Gerhard & Ravikumar, B., 1994. "Public investment in infrastructure in a simple growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(6), pages 1173-1187, November.
    7. Sau‐Him Paul Lau & Chor‐Yiu Sin, 1997. "Public Infrastructure and Economic Growth: Time‐Series Properties and Evidence," The Economic Record, The Economic Society of Australia, vol. 73(221), pages 125-135, June.
    8. Rafael Flores De Frutos & Mercedes Gracia-Diez & Teodosio Perez, 1998. "Public capital stock and economic growth: an analysis of the Spanish economy," Applied Economics, Taylor & Francis Journals, vol. 30(8), pages 985-994.
    9. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    10. Jan-Egbert Sturm, 1998. "Public Capital Expenditure in OECD Countries," Books, Edward Elgar Publishing, number 1500.
    11. Ernst R. Berndt & Bengt Hansson, 1991. "Measuring the Contribution of Public Infrastructure Capital in Sweden," NBER Working Papers 3842, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lau, Sau-Him Paul & Sin, Chor-Yiu, 1997. "Observational equivalence and a stochastic cointegration test of the neoclassical and Romer's increasing returns models," Economic Modelling, Elsevier, vol. 14(1), pages 39-60, January.
    2. Timothy Kam & Yi‐Chia Wang, 2008. "Public Capital Spillovers and Growth Revisited: A long‐run and Dynamic Structural Analysis," The Economic Record, The Economic Society of Australia, vol. 84(266), pages 378-392, September.
    3. Wang, Yi-Chia, 2014. "Evidence of public capital spillovers and endogenous growth in Taiwan," Economic Modelling, Elsevier, vol. 39(C), pages 314-321.
    4. Theo Eicher & Stephen J. Turnovsky, 2000. "Scale, Congestion and Growth," Economica, London School of Economics and Political Science, vol. 67(267), pages 325-346, August.
    5. Fisher, Walter H. & Turnovsky, Stephen J., 1997. "Congestion and Public Capital," Economics Series 47, Institute for Advanced Studies.
    6. Getachew, Yoseph Y. & Turnovsky, Stephen J., 2015. "Productive government spending and its consequences for the growth–inequality tradeoff," Research in Economics, Elsevier, vol. 69(4), pages 621-640.
    7. Diego Martinez-Lopez, 2006. "Linking Public Investment to Private Investment. The Case of Spanish Regions," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(4), pages 411-423.
    8. Moisa Altar & Judita Samuel, 2008. "Fiscal Policy, Public Capital and Economic Growth," Advances in Economic and Financial Research - DOFIN Working Paper Series 5, Bucharest University of Economics, Center for Advanced Research in Finance and Banking - CARFIB.
    9. Peter Nijkamp & Jacques Poot, Victoria, 2002. "Meta-Analysis of the Impact of Fiscal Policies on Long-Run Growth," Tinbergen Institute Discussion Papers 02-028/3, Tinbergen Institute, revised 23 Apr 2003.
    10. Moisa Altar & Judita Samuel, 2008. "The Influence of Fiscal Policy on Economic Growth," Advances in Economic and Financial Research - DOFIN Working Paper Series 7, Bucharest University of Economics, Center for Advanced Research in Finance and Banking - CARFIB.
    11. Cavalcanti, Carlos B. & Marrero, Gustavo A. & Le, Tuan Minh, 2014. "Measuring the impact of debt-financed public investment," Policy Research Working Paper Series 6766, The World Bank.
    12. Nijkamp, Peter & Poot, Jacques, 2004. "Meta-analysis of the effect of fiscal policies on long-run growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 91-124, March.
    13. Lau, Sau-Him Paul, 1997. "Using stochastic growth models to understand unit roots and breaking trends," Journal of Economic Dynamics and Control, Elsevier, vol. 21(10), pages 1645-1667, August.
    14. Pedro R.D. Bom & Jenny E. Ligthart, 2014. "What Have We Learned From Three Decades Of Research On The Productivity Of Public Capital?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 889-916, December.
    15. Ejaz Ghani & Musleh-Ud Din, 2006. "The Impact of Public Investment on Economic Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(1), pages 87-98.
    16. Musisi, A.A., 2006. "Physical public infrastructure and private sector output/productivity in Uganda: a firm level analysis," ISS Working Papers - General Series 19182, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    17. Stephen J. Turnovsky, 2000. "Growth in an open economy: some recent developments," Working Paper Research 05, National Bank of Belgium.
    18. Ingrid Ott & Susanne Soretz, 2006. "Governmental activity, integration, and agglomeration," Working Paper Series in Economics 57, University of Lüneburg, Institute of Economics.
    19. Schreiner, Lena & Madlener, Reinhard, 2022. "Investing in power grid infrastructure as a flexibility option: A DSGE assessment for Germany," Energy Economics, Elsevier, vol. 107(C).
    20. David, Oladipo Olalekan, 2019. "Nexus between telecommunication infrastructures, economic growth and development in Africa: Panel vector autoregression (P-VAR) analysis," Telecommunications Policy, Elsevier, vol. 43(8), pages 1-1.

    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:acb:cbeeco:2006-474. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/feanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.