In contrast to other empirical studies, this paper analyzes the effect of public
investment on infrastructure on the Chilean growth. Based on Glomm and
Ravikumar (1994) and Yoke (2001), we present a stochastic model to test the
hypothesis of endogenous growth against exogenous growth. On the basis of
this model we estimate a long-run relationship among output, public investment
in infrastructure and private capital. This relationship is verified using
the Johansen’s cointegration test during the 1975-2000 period. The results show
that there is a positive relationship between output and public investment in
infrastructure. However, this outcome is neither consistent with the exogenous
growth hypothesis nor public investment spillovers. In spite of that, the estimates
suggest that an increase of 10% in public investment in infrastructure generates an increase of 1.6% in total output (both variables expressed in per
workers terms).
Rivera, J., & Toledo, P. (2016). Efectos de la infraestructura pública sobre el crecimiento de la economía, evidencia para Chile. Estudios De Economía, 31(1), pp. 21–38. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/40855
