Growth and Debt Effects of a Credit-Financed Public Investment Offensive/Wachstums-und Verschuldungseffekte einer kreditfinanzierten offentlichen Investitionsoffensive

Simulations of a deficit-financed public investment programme in Germany amounting to 460 billion [euro] over ten years in the macroeconomic model NiGEM show that it will finance itself in 30 years at most, even under conservative model assumptions. In the basic version of the model, GDP is 3 % to 4...

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Bibliographic Details
Published in:Wirtschaftsdienst (Hamburg) 2021-09, Vol.101 (9)
Main Authors: Dullien, Sebastian, Jurgens, Ekaterina, Paetz, Christoph, Watzka, Sebastian
Format: Article
Language:English
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Summary:Simulations of a deficit-financed public investment programme in Germany amounting to 460 billion [euro] over ten years in the macroeconomic model NiGEM show that it will finance itself in 30 years at most, even under conservative model assumptions. In the basic version of the model, GDP is 3 % to 4 % above the baseline in the long run. Additionally, private investment is stimulated and rises by 4 % to 5 % above the baseline. These effects are amplified when an increase in the productivity of the private capital stock due to improved public infrastructure is taken into account. JEL Classification: C5, E6, H5, H6 Offentliche Investitionen stehen ganz oben auf der wirtschaftspolitischen Agenda in Deutschland. Simulationen mit dem makrookonomischen Mehrlandermodell NiGEM zeigen, dass sich ein grosses, 460 Mrd. Euro umfassendes, kreditfinanziertes Investitionsprogramm nach spatestens 30 Jahren selbst finanzieren wurde. In der Zwischenzeit wurden Wirtschaftsleistung und private Investitionstatigkeit deutlich kraftiger ausfallen als ohne solch eine Initiative.
ISSN:0043-6275
DOI:10.1007/s10273-021-3003-5