2018
DOI: 10.24294/jipd.v2i2.839
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On the Effects of Infrastructure Investment on Economic Performance in Ontario

Abstract: Over the past decade, Ontario has seen a renewal in efforts to stimulate economic growth by investing in infrastructures. In this paper, we analyze the impact of public infrastructure investment on economic performance in this province. We use a multivariate dynamic time series methodological approach, based on the use of vector autoregressive models to estimate the elasticities and marginal products of six different types of public infrastructure assets on private investment, employment and output. We find th… Show more

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Cited by 8 publications
(12 citation statements)
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“…They conclude that this type of infrastructure helps to explain income disparities across regions. Another relevant piece of research is Pereira and Pereira (2018), a study for Ontario, Canada, where, in a methodological framework similar to ours, health investments are found to have rather important aggregate effects. Again, no industry-level analysis is provided.…”
Section: Literature Reviewmentioning
confidence: 92%
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“…They conclude that this type of infrastructure helps to explain income disparities across regions. Another relevant piece of research is Pereira and Pereira (2018), a study for Ontario, Canada, where, in a methodological framework similar to ours, health investments are found to have rather important aggregate effects. Again, no industry-level analysis is provided.…”
Section: Literature Reviewmentioning
confidence: 92%
“…For this reason, we compare our results with evidence on the output multiplier of investments in health care infrastructure in strictly comparable cases. Focusing on Ontario, Canada, and using data that spans 1976 through 2011, Pereira and Pereira (2018) estimate an output multiplier of 23.46, and a corresponding 99.85 net jobs created for each CDN$ 1m in health care investments (Deloitte, 2013, p. 37). Our estimates, 20.45 and 188, respectively, are of the same order of magnitude.…”
Section: On the Economic Effects Of Health Care Investmentsmentioning
confidence: 99%
“…There are a few theories relating to the cause and effect of infrastructure investment. Macroeconomic modeling has developed over time as the economic model with which to study the productivity effects of infrastructure (Lakshmanan, 2011), tracking the annual percentage changes in total factor productivity as a result of public capital estimated from the coefficients of production function (Pereira and Pereira, 2018). Munnell and Cook (1990) followed the same method using different data and found comparable output elasticities of 0.31-0.39 for core public capital.…”
Section: Infrastructure and Economic Growthmentioning
confidence: 99%
“…According to Weisbrod (1997), the multiplier effect across most US industries ranges from 1.5 to 3.0 depending on the localized level. If the level of infrastructure falls below a critical level, productivity suffers, resulting in a contraction of the economy, as accumulation of transport infrastructure grows but the positive impact of that growth decreases (Pereira and Pereira, 2018). Infrastructure also has inverse multiplier effects during periods of reduced investment (Vashakmadze et al, 2018).…”
Section: Infrastructure and Economic Growthmentioning
confidence: 99%
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