Increase In Public Investment Research Articles

The impact of unprecedented growth in public investment on stimulating the Indian economy

The aim of the article is to compare the effects of public investment and public consumption in the Indian economy. This issue is particularly relevant in the context of the unprecedented increase in public investment in India, which is becoming one of the biggest economies globally. The empirical research is based on a New Keynesian model. The novelty of the applied methodology lies both in the inclusion of public capital as a factor of production, and the partial substitution between public and private consumption in the model. The results show that government gross capital formation in the short run is a slightly more effective method of stimulating the Indian economy than government final consumption expenditure. However, the biggest differences between the effects of public investment and public consumption are evident in the long term. The impact of public consumption on GDP fades out quickly, while public investment raises the level of output for a long period. Government gross capital formation also affects employment and consumption more strongly than government final consumption expenditure does. Thus, the main implication of the study is to recommend increasing public investment in emerging markets, to boost their economies.

Determinants of access to improved drinking water and sanitation in India: evidence from India Human Development Survey-II (IHDS)

Abstract Access to improved drinking water and sanitation has been declared a fundamental right by the UN General Assembly. However, around 25 and 50% of the global population lacked access to safely managed drinking water and improved sanitation in 2020, respectively. India, the second most populous country in the world, has around 3.7 and 31% of its population without access to improved drinking water and sanitation, respectively. This paper explores the factors determining a household's access to improved drinking water and sanitation in India, using India Human Development Survey (IHDS) II data. The results indicate that urban households with bigger family sizes, with fewer rooms, married but uneducated household heads, belonging to forward castes, were more likely to have access to improved drinking water. Similarly, households with married female heads, belonging to forward castes, small household sizes, older aged heads with primary education, from Non-EAG (Empowered Action Group) states, located in urban areas, earning higher incomes and having more rooms were more likely to have access to improved sanitation. Findings suggest subsidized improved water and sanitation services and an increase in public investment to make these facilities affordable for poor rural households.

THE MISSING LINK: MODELLING POTENTIAL OUTPUT AT THE OFFICE FOR BUDGET RESPONSIBILITY

I outline the missing link in macroeconomic analysis of fiscal policy. While the Office for Budget Responsibility’s (OBR) remit does allow it to judge whether the effects of fiscal (or other economic policies) on potential output are material, such judgements will matter little for the horizon over which it is being asked to assess whether the government will meet its fiscal rules. Even if there is a material permanent increase in public investment, for example, as in the 2020 March Budget with a commitment to step from 2% of GDP to 3% of GDP, it takes a quite some time before it cumulates to a sufficient impact on the stock of public capital and on potential output to make a significant difference to the fiscal denominator. But it surely will.

Человеческий капитал сельских регионов современного Китая

The purpose of the article is to analyze the results of actual theoretical and empirical studies of the process of accumulation of human capital in rural regions of China at the present stage of economic development. The PRC is still a country with a large proportion of the population living and working in rural regions. That is why the sustainability of the development of these regions and the country’s economy as a whole is largely determined by the peculiarities of the development of the labor resources of Chinese villages. The process of accumulation of human capital in rural regions plays an important role in China’s economic and social policy, as well as in solving the problem of ‘sannun’. The process of accumulation of human capital is influenced by three groups of interrelated factors: urbanization with Chinese characteristics, the level and quality of life, infrastructure and socio-institutional environment. The results of a comprehensive analysis of the influence of these groups of factors led to the conclusion that an elementary increase in public investment in the agricultural sector and rural regions of the PRC against the background of the development of free market relations, urbanization and income differentiation is not enough to ensure conditions for sustainable economic development and solving this problem. The role of human capital in the development of rural regions of China will increase only with the provision of opportunities to create an effective infrastructure and a favorable socio-institutional environment for its accumulation

The Integrated Impact of Drought on Crop Yield and Farmers’ Livelihood in Semi-Arid Rural Areas in China

Drought has a profound impact on crop yield and the subsistence farming economy in arid and semi-arid lands of developing countries. It creates insecurity in the food supply and livelihood of rural farmers, leading to different livelihood trajectories and transformations. However, a primary challenge is to examine the complexity and location-specificity of drought impact. This study proposes a conceptual framework to understand the integrated drought impact on Yuzhong County in Gansu Province, China. Specifically, the study applies the standardized precipitation index at different time scales to observe drought changes from 1960 to 2017 and estimates the correlation with crop yield. Then, farmers in the northern, central, and southern regions of Yuzhong County were categorized using two-step cluster analysis, based on survey data collected from 1013 interviews conducted in the three regions. The study explores the impact of drought on the livelihood and food security of different clusters of farmers and analyzes their livelihood trajectories and transformations. The results showed that the drastic years with moderate and severe droughts were 1981–1983, 1997, and 2011–2012. Drought was significantly correlated with crop yield, and the effect of SPI12 was more severe. Five clusters of farmers in the southern regions of Yuzhong county were affected by drought with large drought disaster areas and serious economic losses, leading to high rates of affordability deficit and food insecurity, especially in the southern region. As a result, farmers have been adapting their livelihoods to drought, transforming toward mixed livelihoods in the northern region and part-time agricultural livelihoods in the central and southern regions. This study recommends an increase in public investment in water conservancy and irrigation facilities and suggests that locations and policies be utilized to promote the transformation of farmers’ livelihoods to make them more resilient.

Producción científica en Relaciones Públicas a través de las revistas de mayor impacto del Caribe Latinoamericano / Scientific production in Public Relations through the journals with the greatest impact in the Latin American Caribbean

Scientific production in Latin America and the Caribbean has experienced great growth in recent years (Álvarez-Muñoz y Pérez-Montoro, 2016; Santa y Herrero, 2010), due in part to the increase in public investment in science in these countries and the indexing of their journals in global (Scopus or Wos) and regional (Latindex or Redalyc) databases of bibliographic references. However, in the area of communication, the publication of academic articles is still embryonic. There are several academic studies (Flores-García y Becerril-García, 2020; López- Ornelas et al., 2017; Rogel-Salazar et al., 2017) that highlight the scarce of disclosure of scientific knowledge in this region, remarking the limited presence of communication journals published in Latin America and indexed in databases. In the specific area of public relations, the conceptualization and recognition of this discipline in the academic and professional field has been increasing since the mid-twentieth century. However, despite the progress experienced, the small number of existing studies on the subject in these journals, justify this investigation line. In this sense, this research, within the framework of bibliometric studies, proposes to determine the position occupied by public relations in the academic production about communication of the main journals of the Latin American Caribbean in the last ten years (2010-2020); as well as analyzing the main characteristics of these publications by examining the areas of knowledge of the published texts, the institutions from which they come or its authorship, among other aspects such as the object of study and the methodological procedure used in the research. The scientific journals that make up the sample (Comunicación y Sociedad, from Mexico, Palabra Clave and Signo y Pensamiento, both from Colombia) have been selected on the basis of representativeness criteria such as the impact index in the Scopus bibliographic database and the geographical scope of the Latin American Caribbean. The results indicate that the discipline of public relations is marginal in the overall scientific production in the area of communication in the Latin American Caribbean. Most of the texts published by the journals with the highest impact index in the region focus on fields related to communication, but are far removed from the specific area of public relations. However, it is noticeable that in recent years greater attention has been paid to this discipline, with an increase in scientific production in the period between 2016 and 2020. The findings obtained also allow us to establish a profile of the scientific production on public relations disseminated in the decade from 2010 to 2020 by the leading journals in the Latin American Caribbean. A collective authorship, balanced in terms of the sex of the signatories, mainly from universities in Latin America and Spain, and the use of empirical approaches from a qualitative perspective, define the type of academic production analysed. Despite the limitations that this research presents when it comes to extrapolating the results to the whole of the scientific production on public relations in territories other than the Latin American Caribbean, it is outlined as an exploratory study and a first approach to the still incipient research on the discipline of public relations in Caribbean academic journals.

Uncertainty and Public Investment Multipliers: The Role of Economic Confidence

This paper investigates how macroeconomic uncertainty affects the fiscal multiplier of public investment. In theory, uncertainty can reduce the multiplier if the private sector becomes more cautious and does not respond to the fiscal stimulus. Conversely, it can increase the fiscal multiplier if public investment shocks improve private agents’ expectations about future economic outlook, and lead to larger private spending. Using the disagreement about GDP forecasts as a proxy for uncertainty, we find that unexpected increases in public investment have larger and longer-lasting effects on output, investment, and employment during periods of high uncertainty, with multipliers above 2, and the larger multipliers are not driven by economic slack. Public investment shocks are also found to boost private sector confidence during heightened uncertainty, driving-up expectations about future economic development which in turn magnify private sector response to the initial stimulus.

Public investment multipliers: Evidence from stock returns of the road pavement industry in Japan

This study contributes empirical evidence of the macroeconomic impacts of public investment. I extract public investment news shocks from the excess returns of narrowly defined road pavement firms and use them as an instrument for future public investment spending. Using Japanese data for the period between 1980 and 2014, I find that when the news shock is followed by a persistent increase in public investment and a weak real interest rate response, the public investment spending has a significant stimulative effect over the medium term. The estimated cumulative multiplier is as large as 6.10, four years after the shock. However, the cumulative multiplier eventually falls below 1 after 10 years. I also report a substantial temporary improvement in aggregate labor productivity associated with a rise in public investment spending.

Economic activity vs generation of local budgets’ revenues: Regional disparities in COVID-19 instability

In the last two years, Ukraine and the world have been living in economic instability caused by the COVID-19 pandemic, which has fundamentally changed the trends in global and domestic economies, public and local finance. This study aims to estimate the trends of economic development of Ukrainian regions in the coronavirus crisis and their impact on the local budgets’ tax revenues generation. Main findings show the impact of the COVID-19 crisis on the development of Ukrainian regions is territorially differentiated. It is determined that in quarantine restrictions, the regions were developing under the impact of behavioral and institutional factors. Although a range of enterprises terminated their activities and there was a decline in income from business activities in 2020, the tax revenues of local budgets increased. The growth of tax revenues was accompanied by decreasing interbudgetary transfers and growing expenditures on containing the spread of pandemics and supporting healthcare. Reduced transfers to local budgets from the public budget affected the funding of investment programs of regional development. The abovementioned effects of falling business activity and consumer expenditures of the population along with falling investment can be considered the delayed effects of economic activity curtailment in the short-term period. An intensive increase of public investment that stipulates projects co-funding from budget funds and resources of businesses and establishment of cooperation between public, regional, and local levels of government should become among the primary steps to overcome the negative trends.

INTELLIGENT HIGH-SPEED PASSENGER ELECTRIC TRANSPORT (ISET-150) FOR LARGE CITIES OF UKRAINE

The high-speed passenger transport development is one of the most important tasks for the successful functioning of any large or largest city transport system. The modern society of the biggest cities-megalopolises needs a constant increase in the volume of transport communications. This requires an increase in costs to improve the infrastructure of the transport network, turning it into a flexible, highly manageable logistics system. However, this significantly increases the risk of investment, if one does not take into account the patterns of development of the transport network, the distribution of load on its sections. Ignoring these patterns leads to frequent traffic jams (transport congestion), overloading, an increase in the accident rate, and a complete dependence on the cost of oil products. Lack of developed infrastructure for road transport and low-speed public transport significantly hampers economic development. Therefore, a radical increase in public investment in stimulating the urban economy would necessarily include modernization of transport infrastructure. All infrastructural activities should be carried out on the territory of the country – thereby creating new jobs and strengthening the industry. Well-chosen infrastructure projects that provide conditions for economic development for decades and for many generations represent the best use of public debt capital.
 For creation in large cities of Ukraine, especially with difficult climatic and geological conditions, with difficult climatic and geological conditions, as well as with a poorly developed highway system, a new overhead electric high-speed passenger, economy and environmentally friendly, transport, with cabins, is proposed.
 To organize the safe movement of controlled crews with passengers, the theory of saturated traffic flows was used, which describes the movement of crews in a stream as a continuous change in the states of acceleration, uniform movement and braking, i.e. synchronized three phases «start-go-stop» in one control algorithm. 

ЕКОНОМІКА РЕГІОНІВ В УМОВАХ КОРОНАКРИЗИ: ТЕНДЕНЦІЇ РОЗВИТКУ ТА ЇХ ВПЛИВ НА ПОДАТКОВІ ДОХОДИ МІСЦЕВИХ БЮДЖЕТІВ

For the last year, Ukraine's economy has been operating in conditions of economic turbulence caused by the COVID-19 epidemic. This has been accompanied by an increase in the uneven development of the regions, which is caused, along with macroeconomic constraints, and the peculiarities of the behavior of government, business and the population. The tendencies of economic development of the regions of Ukraine in the conditions of coronavirus crisis and their influence on the formation of tax revenues of local budgets by means of such methods as abstract-logical, comparative analysis, graphic visualization, statistical are evaluated. Analysis of economic development trends in the regions of Ukraine in the context of the coronavirus crisis and their impact on the formation of tax revenues of local budgets suggests that the economic, social and fiscal effects of the COVID-19 crisis are territorially differentiated. At the same time, the development of regions during the quarantine restrictions took place depending on behavioral and institutional factors that led to a number of irrational decisions by the subjects of financial and economic relations at different levels of government. Despite the cessation of a number of enterprises and the decline in business revenues, in 2020 tax revenues of local budgets increased. However, this was accompanied by a decrease in intergovernmental transfers and an increase in spending on curbing the spread of the pandemic. The outlined effects of declining economic activity of business, consumer spending (along with falling investment) can be considered a delayed effect of curtailing economic growth in the short term. One of the priority steps to overcome the negative trends should be an intensive increase in public investment, which involves co-financing projects from budget funds and business resources, establishing cooperation between state, regional and local levels of government.

Green economy as a factor of sustainable development: European experience

The experience of implementing approaches of the green economy as an interaction and mutual influence between urban civilization and the biosphere is discussed. Sustainable urban development, based on the principles of a green economy, leads to an increase in human well-being in the long term, while not exposing future generations to significant environmental risks. The issue of sustainable development is being actively studied since currently the welfare of mankind is more and more determined by the quality of life in cities. In the future, the gap in numbers between urban and rural populations will only grow, and an increasing part of the world population will be represented by residents of urban areas. Sustainable urban development is understood as the ability of the urban environment to change, satisfying subsequent generations of residents in terms of security, convenience of living and activities, communications, logistics, infrastructure, architecture and design, with minimal costs for multiple transformations. European countries such as Sweden, Denmark and others show an increase in public investment in infrastructure consistent with the principles of sustainable development (including public transport, renewable energy, construction of energy-efficient buildings) and natural capital; Existing models for implementing the principles of the green economy and the practice of their implementation in Europe have shown that Russia needs social strategies designed to ensure alignment between social goals and existing or proposed economic strategies.

Analysis on the Macroeconomic Effects of Public Investment in Pandemic Recovery

This study used the Bayesian methodology to estimate and calibrate a small-scale DSGE model of the Philippines. The goal of this study was to review the risk associated with increases in sovereign deficits. The major results of the study are: Estimates of fiscal rules show that fiscal authority provides more emphasis on debt to GDP than output and deficits. In addition, the stochastic simulation shows that increases in public investment don't limit increases in private investment. And both public and private investment exhibit procyclical behaviors in presence of government spending shock. Lastly, the output is more persistent during episodes of technology shocks than on an increase in government spending. The paper also shows that there is no significant difference in result between the fiscal authority’s alternative fiscal rules of responding on levels of deficits and debt or levels of deficits and debt from its target.

Econometric Study of the Impact of Public and Private Investment on Economic Growth in Algeria during the Period (1970-2017)

This article examines the impact of public and private investment on economic growth in Algeria covering the period from 1970 to 2017. By applying the Auto-Regressive Distributed Lag model (ARDL)-(bounds testing approach).
 The key findings of the study concluded that there is a long-run relationship between public and private investment and economic growth in Algeria.
 The result of the Augmented Dickey Fuller unit root test (ADF) showed that the variables are stationary at the level and at the first difference. In addition, the results of the cointegration test indicated that the variables are cointegrated and therefore have the ability to move together over the long term.
 The parsimonious error correction mechanism showed that private investment is significantly related to economic growth. The result indicated that a 1 percent increase in the present value of private investment, on average, stimulates economic growth by 0.09 percent. Similarly, the value of public investment is positively related to economic growth. On average, a 1 percent increase in public investment stimulates growth in Algeria by 0.05 percent.
 the results of short-run dynamics reveal that, the error correction term (ECM) is negative and significant (-0.54), which means that 54% of the disequilibrium will be adjusted annually.

Public investment versus government consumption: how FDI shocks shape the composition of subnational spending in Mexico

During the 1990s, many developing countries underwent simultaneous processes of global economic integration and decentralization. As a result, subnational governments became increasingly important actors in the international economy, including through policies to secure investments from multinational corporations (MNCs). These efforts have the potential to affect the management of public resources at the subnational level. Breaking from the literature's focus on fiscal incentives, we highlight how “active” foreign investment incentives—including commitments to build new infrastructure and develop worker training programs—have shaped subnational public finances in Mexico. We demonstrate that FDI attraction affected how subnational governments exercised their growing policy authority and fiscal resources. Based on panel data from Mexican states between 1998 and 2017, we find that FDI shocks are associated with statistically and economically significant increases in public investment by state governments, and decreases in public sector consumption of goods and non-personnel services. A case study of a representative investment project in Puebla highlights the importance of active investment incentives as a causal mechanism linking FDI attraction and subnational spending outcomes. Our results illustrate how FDI attraction can affect the distribution of subnational public spending and also develop a theoretically-relevant distinction between passive and active investment incentives.

The Fiscal Multiplier of Public Investment

This paper explores whether public investment crowds out or crowds in private investment. To this aim, we build a database of about half a million firms from 49 countries. We find that the effect of public investment on corporate investment depends both on leverage and financial constraints. Public investment boosts private investment for firms with low leverage. However, for firms with high leverage, private investment does not react to an increase in public investment, in line with theory (Myers 1977). We also find that the effect of public investment on corporate investment is much weaker for firms that are financially constrained.

Public investment and economic growth in ECOWAS countries: Does governance Matter?

The ECOWAS countries have been facing weak economic performance in recent decades. While the role of investment as an engine of growth is undeniable, the effect of public investment remains less clear. The role of the quality of governance in the effectiveness of public investment is increasingly recognized. The objective of this study is twofold. On the one hand, we analyze the effect of public investment on economic growth. On the other hand, we analyze the role of governance in the relationship between public investment and growth in the ECOWAS countries. To this end, we use an error correction model (ECM) on panel data for the period 1996–2016. We privileged the Pooled Mean Group (PMG) estimator in this study. Our results show that public investment has a positive and significant effect on economic growth in ECOWAS countries in the long-term. Moreover, governance improves the positive effect of public investment on economic growth. Particularly, political stability and rule of law represent institutional dimensions, which amplify the positive effect of public investment on growth in these countries. Thus, the improvement of governance quality and increasing public investment are complementary to foster economic growth. In addition, the promotion of private investment and the attractiveness of foreign direct investment should accompany any governance reform and increase in public investment to promote economic growth.

Future of Work and Emerging Challenges to the Capabilities of the Indian Workforce

In recent years, there have been unprecedented changes in technologies driven by automation, robotics and artificial intelligence, the fusion of which is referred to as the Fourth Industrial Revolution (I-4) with a potential to change the future of work. One of the worldwide concerns is on the employment effects of I-4. There are two scenarios—one called as “automation anxiety” that focuses on labour substitution effects and the other which is “optimistic” of technological complementarity of creating new jobs. Either way, what is certain is that the nature of the future of work will not be the same as it is in the present, and the future workforce needs agile capabilities. The preparation for such a challenge begins with the foundational school education. This paper, after a brief overview of the debate on the impact of I-4 on employment, turns to the issue of the preparedness in India in terms of the foundational education at the school level. Based on the evidence, it documents the deep learning crisis in school education in India and argues for strengthening foundation-level school education through an increase in public investment and public provision that would ensure better capabilities in an equitable way.

Increasing public investment can be an effective policy in bad times: Evidence from emerging EU economies

Using Local projections and a Panel Structural Vector Auto-Regressive model, we evaluate the effectiveness of fiscal policy in the Central and East European EU economies. We find that an increase in public investment has a strong positive effect on output, employment, wages and consumption during periods of economic downturn. Deficit-financed public investment does not increase the debt-to-GDP ratio and is essentially self-financed. In contrast, an increase in public consumption has little impact on economic activity and increases the debt-to-GDP ratio. The observed short term effects concur with a neo-Keynesian pattern suggesting that increase in public investment boosts the demand for labor in the private sector, leading to higher real wages and higher consumption. In the medium term, an increase in public investment enhances private investment thus generating supply side effect. We conclude that public investment can be an important policy instrument for combatting recessions and stimulating long-run growth, since monetary policy has run out of steam.

Don't rely on public investment to save the day

▀ We think public investment in the advanced economies should be increased, but we're also sceptical that, on its own, it can save economies from recession in the event of further negative shocks. ▀ Deteriorating infrastructure and low bond yields make a compelling case for sustained increases in public investment. And given the shortage of safe assets and the global savings glut, higher government borrowing seems unlikely to have big negative repercussions for private sector borrowers. ▀ But the scope for a sustained and aggressive rise in public investment to counter shocks is limited. Even when funds are plentiful, governments often struggle to meet capital spending targets due to other constraints. ▀ Spikes in public investment during downturns typically dry up the capital pipeline, leading to falling investment further ahead. As a result, it's harder to sustain increases in investment, compared to other government spending.