Tax Multipliers and Infrastructure Investment

This article develops a dynamic and stochastic general equilibrium model to analyze the different effects of government expenditures based on consumption and on investment for the Brazilian economy. The model includes public capital as a production factor and analyzes the impact of public investment...

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Bibliographic Details
Published in:Revista brasileira de economia 2015-01, Vol.69 (1), p.75-104
Main Author: MOURA, Guilherme V
Format: Article
Language:Portuguese
Subjects:
Appropriations and expenditures
Brazilians
Capital
Consumption
Fiscal policy
Infrastructure
Investments
Productivity
Public investments
Online Access:Get full text
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Summary:This article develops a dynamic and stochastic general equilibrium model to analyze the different effects of government expenditures based on consumption and on investment for the Brazilian economy. The model includes public capital as a production factor and analyzes the impact of public investment on the marginal productivity of private inputs and on GDP. The analysis is based on present value multipliers, allowing the consideration of the dynamic effects of fiscal policy. The results show the advantages of a fiscal policy based on investment in comparison to a fiscal policy based on consumption expenditures. Adapted from the source document.
ISSN:0034-7140
DOI:10.5935/0034-7140.20150004