Is public capital really productive? A methodological reappraisal - Archive ouverte HAL
Journal Articles European Journal of Operational Research Year : 2013

Is public capital really productive? A methodological reappraisal

Abstract

We present an evaluation of the main empirical approaches used in the literature to estimate the contribution of public capital stock to growth and private factors' productivity. Based on a simple stochastic general equilibrium model, built as to reproduce the main long-run relations observed in US post-war historical data, we show that the production function approach may not be reliable to estimate this contribution. Our analysis reveals that this approach largely overestimates the public capital elasticity, given the presence of a common stochastic trend shared by all non-stationary inputs.
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Dates and versions

halshs-00804179 , version 1 (25-03-2013)

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  • HAL Id : halshs-00804179 , version 1

Cite

Alexandru Minea, Christophe Hurlin. Is public capital really productive? A methodological reappraisal. European Journal of Operational Research, 2013, 228, pp.122-130. ⟨halshs-00804179⟩
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