Working Paper: NBER ID: w3842
Authors: Ernst R. Berndt; Bengt Hansson
Abstract: Our purpose in this paper is to examine how one might evaluate and measure the contribution of public infrastructure capital on private sector output and productivity growth in Sweden. We do this by specifying and implementing empirically a number of alternative econometric models, using annual data for Sweden from 1960 to 1988. Using a dual cost function approach, we find that increases in public infrastructure capital, ceteris paribus, reduce private sector costs. We compute that amount of public infrastructure capital that would rationalize the cost savings incurred by the private business and manufacturing sectors, and find that the amount that can be rationalized in this manner is less than what was in fact available in 1988, but that the extent of excess public infrastructure capital has been falling in the 1980's.
Keywords: Public Infrastructure; Productivity Growth; Econometric Models
JEL Codes: H54; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| public infrastructure capital (H54) | private sector costs (J32) |
| private sector costs (J32) | productivity growth (O49) |
| public infrastructure capital (H54) | productivity growth (O49) |