Publications

Public sector

From this page you can access thematically grouped Analytical Articles published in the Economic Bulletin from 1999, ordered by date of dissemination within each year.

  • 25/05/2022
    The response of private investment to an increase in public investment  File PDF: Opens in a new window (468 KB) Mario Alloza, Danilo Leiva-León and Alberto Urtasun

    Since the 2008 crisis, public investment as a proportion of GDP has declined significantly both in Spain and in other euro area countries. That trend recently came to an end, given that public expenditure has been bolstered in response to the health crisis and will be further reinforced in Spain by the EU funds received under the Next Generation EU (NGEU) programme. Public investment’s effect on economic activity will depend, among other factors, on its impact on private investment, the sign of which is, a priori, ambiguous. This article assesses the short-term relationship between public and private investment using the structural vector autoregressive (SVAR) approach. The results suggest that, on average, increases in public investment in Spain tend to generate a positive impact on private investment. In particular, an increase of 1% in public investment would be associated with an equivalent increase in private investment in the short term. This finding underscores the important role that NGEU could play in economic developments in the years ahead.

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