Can an increase in public investment sustainably lift economic growth? / Annabelle Mourougane, Jarmila Botev, Jean-Marc Fournier, Nigel Pain, Elena Rusticelli
Contributor(s): Resource type: Ressourcentyp: Buch (Online)Book (Online)Language: English Series: OECD. OECD Economics Department working papers ; no. 1351Publisher: Paris : OECD Publishing, 2016Description: 1 Online-Ressource (circa 38 Seiten) : IllustrationenSubject(s): Genre/Form: DOI: DOI: 10.1787/a25a7723-enOnline resources: Summary: This paper seeks to identify the conditions under which raising public investment can sustainably lift growth without deteriorating public finances. To do so, it relies on a range of simulations using three different macro-structural models. According to the simulations, OECD governments could finance a ½ percentage point of GDP investment-led stimulus for three to four years on average in OECD countries without raising the debt-to-GDP ratio in the medium term, provided projects are sound. After one year, the average output gains for the large advanced economies of such a stimulus amount to 0.4-0.6%. However, the gains are particularly uncertain for Japan. Reprioritising spending in later years would lead to average long-term output gains of between 0.5 to 2% in the large advanced economies. Those gains depend on the assumptions made on the rate of return. Hysteresis reinforces the case for an investment-led stimulus. Output gains will also be higher if the stimulus is combined with structural reforms and if countries act collectively.PPN: PPN: 876183852Package identifier: Produktsigel: ZDB-13-SOC | ZDB-13-SOC-ebookNo physical items for this record
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