Langfristige Wirkungen öffentlicher Investitionen –Theoretische und empirische Aspekte –

Abstract

Macroeconomic theory suggests that public capital investment makes a significant contribution to economic growth. Applying an error correction model to data series for Germany shows, however, that increases in public infrastructure capital reduce private sector costs only in a negligible way. Moreover, it is demonstrated that conditional demand functions can only provide for very restricted predictions of how additional public investment outlays affect the demand for labor and private capital.

Empirical estimations of productivity effects of public infrastructure usually do not account for the way government activity is financed. Neglecting tax or debt financing, may, however, entail a misspecification of the econometric equations and a misinterpretation of the empirical results. Using a simple neoclassical growth model it is shown that the productivity of public capital investment does not per se justify deficit financing. In economic terms, additional public investment spending is only reasonable if, at the margin, public capital investment is more productive than private capital investment.