Public investment, growth, and debt sustainability : putting together the pieces

Edward E. Buffie, Andrew Berg, Catherine Pattillo, Rafael Portillo, and Luis-Felipe Zanna

We develop a model to study the macroeconomic effects of public investment surges in low-income countries, making explicit: (i) the investment-growth linkages; (ii) public external and domestic debt accumulation; (iii) the fiscal policy reactions necessary to ensure debt-sustainability; and (iv) the macroeconomic adjustment required to ensure internal and external balance. Well-executed high-yielding public investment programs can substantially raise output and consumption and be self-financing in the long run. However, even if the long run looks good, transition problems can be formidable whe

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Year of publication:	2012
Authors:	Buffie, Edward E. ; Berg, Andrew ; Pattillo, Catherine A. ; Portillo, Rafael ; Zanna, Luis-Felipe
Publisher:	Washington, DC : Internat. Monetary Fund
Subject:	Öffentliche Investition \| Public investment \| Wirkungsanalyse \| Impact assessment \| Wirtschaftswachstum \| Economic growth \| Öffentliche Schulden \| Public debt \| Wirtschaftliche Anpassung \| Economic adjustment \| Entwicklungsländer \| Developing countries

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Extent:	Online-Ressource (PDF-Datei: 53 S., 1,452 KB) graph. Darst.
Series:	IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. 12/144 IMF Working Papers
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Includes bibliographical references Systemvoraussetzungen: Acrobat Reader Cover; Table of Contents; I. Introduction; II. The Model; A. Firms; A.1. Technology; A.2. Factor Demands; B. Consumers; C. The Government; C.1. Infrastructure, Public Investment and Efficiency; C.2. Fiscal Adjustment and the Public Sector Budget Constraint; D. Market-Clearing Conditions and External Debt Accumulation; III. Calibration of the Model; Tables; Table 1. Base Case Calibration; IV. The Long-Run Outcome; Table 2. Public Investment Scaling Up, Concessional Borrowing, and Grants; A. Insights from a Simplified Model; Figures; Figure 1. The Long-run Outcome in the Simplified Model B. Numerical SolutionsTable 3. Long-run Effects of Scaling up Public Investment by 3 Percent of Initial GDP; V. The Medium-Term Fiscal and Macroeconomic Adjustments under Different Financing Schemes; A. Unconstrained Tax Adjustment; A.1. The Base Case; Figure 2. Base Case: Unconstrained Tax Adjustment; A.2. More Optimistic and Troublesome Scenarios; Figure 3. Unconstrained Tax Adjustment: Optimistic and Troublesome Scenarios; A.3. Gradually Increasing Transfers, Efficiency, and the Collection Rate of User Fees; Figure 4. Unconstrained Tax Adjustment: The Size of the Scaling Up Figure 5. Unconstrained Tax Adjustment: Increasing TransfersB. Constrained Tax Adjustment Combined with External Commercial Borrowing; B.1. Tax Smoothing and Private Demand Crowding Out; Figure 6. Unconstrained Tax Adjustment versus Constrained Tax Adjustment with External Commercial Borrowing; B.2. Debt Blowups: Structural and Policy Conditions; Figure 7. Constrained Tax Adjustment with External Commercial Borrowing: Varying the Structural and Policy Conditions; C. Constrained Tax Adjustment Combined with Domestic Borrowing Figure 8. Constrained Tax Adjustment: Domestic Borrowing versus External Commercial BorrowingVI. External Shocks and Risks; Figure 9. External TOT Shocks: Shocks Persistence and Financing Schemes; Figure 10. TFP and Risk Premium Shocks and Risks; VII. Concluding Remarks; Appendix A. On Public Investment Efficiency, Rates of Return, and Growth; References Electronic reproduction; Available via World Wide Web
ISBN:	978-1-4755-0407-1 ; 978-1-4755-7725-9 ; 978-1-4755-0407-1
Source:	ECONIS - Online Catalogue of the ZBW

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