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Public versus Private Investment Multipliers in Emerging Market and Developing Economies: Cross-Country Analysis with a Focus on Asia

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  • Jalles, João Tovar

    (University of Lisbon)

  • Park , Donghyun

    (Asian Development Bank)

  • Qureshi, Irfan

    (Asian Development Bank)

Abstract

This paper analyzes the growth impact of public and private investment shocks based on a large sample of emerging and developing countries over the period 1980–2021 with a particular focus on the Asian region. We develop new measures of investment shocks based on cyclically adjusted investment data. Estimations using local projections suggest that public investment shocks play a much greater role in boosting economic growth in comparison with private investment shocks. In emerging market and developing economies (EMDEs) (including in Asia), the growth response to investment shocks is positive and much stronger in recessions relative to economic expansions. Finally, public investment shocks in EMDE and Asian samples crowd-in private investment and private consumption.

Suggested Citation

  • Jalles, João Tovar & Park , Donghyun & Qureshi, Irfan, 2024. "Public versus Private Investment Multipliers in Emerging Market and Developing Economies: Cross-Country Analysis with a Focus on Asia," ADB Economics Working Paper Series 737, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0737
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    More about this item

    Keywords

    fiscal multipliers; public investment; private investment;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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