{
  "title": "Is the Public Investment Multiplier Higher in Developing Countries? An Empirical Exploration",
  "publication": "IMF Working Papers, December 20, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836",
  "overlayPath": "/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836/index.md",
  "summary": "Over the last decade, empirical studies analyzing macroeconomic conditions that may affect the size of government spending multipliers have flourished. Yet, in spite of their obvious public policy importance, little is known about public investment multipliers.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Over the last decade, empirical studies analyzing macroeconomic conditions that may affect the size of government spending multipliers have flourished; however, little is known about public investment multipliers.\n- The paper tests the theoretical implication that public investment multipliers should be higher (lower) the lower (higher) is the initial stock of public capital.\n- Key empirical finding: countries with a low initial stock of public capital (as a proportion of GDP) have significantly higher public investment multipliers than countries with a high initial stock of public capital.\n- The key finding is robust across samples and identification methods."
    },
    {
      "heading": "Samples and identification methods",
      "content": "- Samples analyzed:\n  - European countries\n  - U.S. states\n  - Argentine provinces\n- Identification methods used:\n  - Blanchard-Perotti\n  - Forecast errors\n  - Instrumental variables"
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- The results suggest that public investment in developing countries would carry high returns.\n- Implicit policy recommendation: prioritizing public investment where the initial stock of public capital (as a proportion of GDP) is low could yield larger output multipliers.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836/bundle-manifest.json)",
    "Authors: Alejandro Izquierdo, Ruy Lama, Juan Pablo Medina, Jorge Puig, Daniel Riera-Crichton, Carlos A. Végh Gramont, Guillermo Javier Vuletin",
    "Published: December 20, 2019",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513521114.001",
    "Over the last decade, empirical studies analyzing macroeconomic conditions that may affect the size of government spending multipliers have flourished; however, little is known about public investment multipliers.",
    "The paper tests the theoretical implication that public investment multipliers should be higher (lower) the lower (higher) is the initial stock of public capital.",
    "Key empirical finding: countries with a low initial stock of public capital (as a proportion of GDP) have significantly higher public investment multipliers than countries with a high initial stock of public capital.",
    "The key finding is robust across samples and identification methods.",
    "Samples analyzed:",
    "Identification methods used:",
    "The results suggest that public investment in developing countries would carry high returns.",
    "Implicit policy recommendation: prioritizing public investment where the initial stock of public capital (as a proportion of GDP) is low could yield larger output multipliers.",
    "**Working Paper**"
  ],
  "related": [
    {
      "title": "Working Paper",
      "role": "paper",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2019/wpiea2019289-print-pdf.pdf",
      "summary": {
        "path": "/-/media/files/publications/wp/2019/wpiea2019289-print-pdf.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/wp/2019/wpiea2019289-print-pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836/index.md",
    "json": "/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836/index.json",
    "bundleManifest": "/en/publications/wp/issues/2019/12/20/is-the-public-investment-multiplier-higher-in-developing-countries-an-empirical-exploration-48836/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-18T16:20:41.846Z"
}