Public Investment and Economic Performance in Highly Indebted Poor Countries: An Empirical Assessment
25 Pages Posted: 30 Aug 2005
Abstract
Understanding how public investment affects economic performance in highly indebted low-income countries is crucial in order to implement effective fiscal policies for adjustment with growth. In this paper we provide an empirical analysis to investigate the relationship between public investment, private investment and output. A dynamic econometric procedure is implemented on a selected group of Highly Indebted Poor Countries (HIPCs). Our results provide empirical support for the crowding-in hypothesis and a positive relation between public investment and output.
Keywords: crowding-in hypothesis, economic growth, fiscal adjustment, highly indebted
JEL Classification: O23, E62
Suggested Citation: Suggested Citation
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