Public Capital and Aggregate Growth in the United States: Is Public Capital Productive?

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Facultad de Ciencias Económicas y Empresariales. Instituto Complutense de Análisis Económico (ICAE)
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This paper deals with the empirical relationships between public capital and aggregate economic growth in the United States, and in particular the question of whether or not public capital is productive. It develops a theoretical framework which allows for full consideration of feedback among variables without imposing a priori dynamic structural constraints. Parameter estimates are obtained through a VARMA model. This approach departs from the current literature, which relies on a single equation approach to estimate production functions and implicitly assumes the absence of feedback relations. In this paper estimates for the period 1956-1989 suggest that public capital has a substantial effect on production as well as on private capital formation and on labor. Furthermore, decisions on public capital seem to follow a policy rule that relates the current stock of public capital positively with lagged output and negatively with lagged labor. Our results are shown to be compatible with different specifications of production functions, in which public capital mayor may or may not be present. Therefore, current interpretations of the importance of the effects of public capital in terms of the size of the estimated parameters in a production function framework are not conclusive.
En este trabajo se estudian las relaciones empíricas entre el capital público y el crecimiento agregado de la economía de Estados Unidos. Se desarrolla un marco teórico que permite tener en cuenta el conjunto total de relaciones dinámicas entre las variables, sin imponer a priori restricciones dinámicas estructurales. Las estimaciones de los parámetros se obtienen a través de un modelo ARMA vectorial. Este enfoque difiere del enfoque uniecuacional convencional basado en la estimación de funciones de producción y que implícitamente supone la ausencia de relaciones de retroalimentación. Nuestras estimaciones para el periodo 1956-1989 sugieren que el capital público tiene un efecto substancial sobre la producción, la formación bruta de capital privada y el empleo. Además, decisiones sobre el capital público parecen seguir una regla de política que relaciona positivamente, el stock corriente de capital público con el producto retardado y negativamente, dicho stock con el empleo retardado. Por último se muestra como nuestros resultados son compatibles con diferentes especificaciones de funciones de producción, en las que el capital público puede o puede no estar presente como input. Por consiguiente, las interpretaciones de la importancia de los efectos de capital público en términos del tamaño de los parámetros estimados en una función de Producción no son concluyentes.
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