European Parliament Library

Public Investment and Growth in the Eastern Caribbean, Shaun Roache

This paper quantifies the effect of public investment on growth in the ECCU. The results, emerging from panel vector autoregressions, indicate that the return on public investment, as defined by Perreira (2000), is very likely negative. This means that the total change in real output induced by one EC dollar of public investment, due to its short-run impact on demand, or the longer-run impact on supply, is below one EC dollar. Public investment shocks also appear to appreciate the real exchange rate, suggesting that the short-run demand impact is larger than the long-run supply response
Table Of Contents
Contents; I. Introduction; II. Literature Review; III. Data-Description and Trends; IV. Estimation; A. Panel Vector Autoregressions-Pros and Cons for the ECCU; B. Selection of Endogenous Variables; C. Exogenous Variables-OECD Growth, Aid, Natural Disasters and Elections; D. Model Specification and Estimation; E. Impulse Responses; V. Results; A. The Effects of Aid Flows; B. The Impact of Public Investment on Growth; Tables; 1. ECCU: Rate of Return on Public Investment; C. Granger Causality Test-Public Investment on Output; D. The Impact of Growth on Public Investment
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (22 p.)
Specific Material Designation
Form Of Item

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