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Public and Private Investments in Greece: Complementary or Substitute ‘Goods’?
Author(s) -
Apergis Nicholas
Publication year - 2000
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/1467-8586.00106
Subject(s) - cointegration , investment (military) , economics , crowding out , public investment , government (linguistics) , government spending , public spending , gross private domestic investment , public economics , public good , monetary economics , macroeconomics , market economy , microeconomics , open ended investment company , public fund , return on investment , production (economics) , econometrics , linguistics , philosophy , politics , political science , welfare , law
This paper investigates whether government investment spending exerts a positive or a negative effect on private investments. Time‐series data for Greece as well as the methodology of cointegration suggest that, over the period 1948‐80, public investment spending exerted a positive effect on private investments, while over the period 1981‐96, the relationship turned out to be negative. Empirical results indicate that the large increase of the public share in the total investment process tended to crowd out private investments and to jeopardize the growth process of the economy.