Public and private investments: Long-run asymmetric effects in France and the US

Abstract

We analyse whether private investments are impacted asymmetrically by public investments and how any asymmetry evolves over time. We conduct time series analyses for France and the US within a flexible empirical framework exploiting quarterly data over 1960Q1–2022Q4. The results are summarized as follows: France's private investments are positively impacted by public investments both in the short- and long-run; public investments have a neutral or negative effect on private investments in the US; the asymmetric effects in France become significant and persistent after 10 quarters; some evidence of asymmetry emerges for the US in the long-run.