Public Sector Economics, Vol. 42 No. 2, 2018.
Uvodnik
https://doi.org/10.3326/pse.42.2.1
Introduction to the Public Sector Economics 2017 Conference Issue - Public Investment: catalyst for sustainable growth
Katarina Ott
orcid.org/0000-0003-2242-4181
; Institute of Public Finance, Zagreb
Dubravko Mihaljek
; Bank for International Settlements, Basel, Switzerland
Sažetak
The Institute of Public Finance, publisher of the journal Public Sector Economics, together with the Friedrich Ebert Stiftung, organized its annual conference in Zagreb on 3 November 2017. The main theme of the conference was the role of public investment in sustaining post-crisis growth, and the implications of this role for public finances in countries around the world.
The recovery from the global financial crisis had until 2016 been relatively modest and uneven, led mainly by private consumption. Business fixed investment and productivity growth had been weak and inflation low despite unprecedented monetary stimulus and historically low short- and long-term interest rates in major advanced economies. At the same time, infrastructure needs were sizeable, not least because post-crisis fiscal consolidation had significantly lowered public capital spending ratios. These conditions provided a unique opportunity to increase productive public spending: by locking in low interest rates with long-maturity borrowing, well-targeted spending on education, health or research and development, significant output gains could be obtained in the long run. In such a situation, one could expect additional public investment to generate relatively high rates of return, after allowing for risk, provided that good project governance was in place.
Against this background, many international fora recommended an increase in public investment to support demand and employment in the short run, and catalyze private investment and growth-enhancing innovations in the long run. That said, there were also questions about the ability of governments to identify and implement large-scale investment projects, as well as doubts about the size of public investment multipliers and long-term returns on public capital in a world of diminishing productivity growth, not to mention the impact of higher public investment on debt sustainability.
Ključne riječi
Hrčak ID:
200982
URI
Datum izdavanja:
5.6.2018.
Posjeta: 1.089 *