Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/189549
Authors: 
Machicado, Carlos Gustavo
Year of Publication: 
2007
Series/Report no.: 
Development Research Working Paper Series 14/2007
Abstract: 
It has been widely documented that investment in infrastructure is important for economic growth, but little work has been done in relation to the impact of infrastructure investment on other macroeconomic variables. This paper develops a Dynamic Stochastic General Equilibrium (DSGE) model of a small open economy to study the effects of public investment in infrastructure on output, consumption, private investment, trade balance and welfare. The model is parameterized and solved for five representative countries from The Initiative for the Integration of Regional Infrastructure in South America (IIRSA), which include: Bolivia, Chile, Brazil, Venezuela and Argentina. I also analyze the growth effects on GDP by increasing or decreasing the effectiveness index of infrastructure in each of these countries. Naturally output will grow at a larger rate, if infrastructure is handled with greater efficiency.
Subjects: 
Infrastructure
Economic Growth
Welfare
JEL: 
H54
O40
D60
Document Type: 
Working Paper

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