JEL Classification System
E52, E61, E65, E22, E32
Abstract
The goal of this study is to review the risk associated with increases in sovereign deficits and the role of public investment in pandemic recovery. The estimates of DSGE models show that fiscal authority provides more emphasis on debt to GDP than output and deficits. In addition, the stochastic simulation shows that increases in public investment do not limit the increases in private investment. And both public and private investment exhibit procyclical behaviors in the presence of government spending shock. Lastly, the output is more persistent during episodes of technology shocks than during an increase in government spending. The paper also shows that output, private investment, and government capital and deficit responded more to the fiscal rules that embed government capital than without.
Recommended Citation
Zoleta, Aris
(2023)
"The Role of Public Investment in Pandemic Recovery,"
DLSU Business & Economics Review: Vol. 32:
No.
2, Article 6.
DOI: https://doi.org/10.59588/2243-786X.1158
Available at:
https://animorepository.dlsu.edu.ph/ber/vol32/iss2/6
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