The impact of public investment on private investment in Mexico, 1980-2007
DOI:
https://doi.org/10.24201/ee.v24i2.125Keywords:
public investment, private investment, crowding in effect, crowding out effectAbstract
Even though there is a growing consensus in the existing literature on the positive effect that public investment generates for economic growth, its impact on private investment is by no means a settled issue. This study seeks to determine empirically the relation between these two variables for the Mexican economy during the 1980-2007 period. The results of dynamic estimations yield a partial crowding out of public investment in the short run, while, in the long run, it exerts a weak and marginal complementarity effect on private investment.
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