Regional public stock reductions in Spain: Estimations from a multiregional spatial vector autorregressive model

Miguel A. Márquez, Julian Ramajo, Geoffrey J.D. Hewings

Research output: Contribution to journalArticle

Abstract

The estimation of the impact of public investment on regional economic growth requires consideration of the spatio-temporal dynamics among the state variables of each region. According to recent data, public investment in Spain has fallen in recent years, and in some regions the reduction has been so severe that public investment has not been able to replenish depreciated capital. Recent austerity policies in Spain that feature temporary decreases in the accumulation of regional public capital should thus be evaluated in terms of their impact on the economy as a whole and on specific regions together with the spillover effects from one region to the rest of the regional system. This paper uses a multiregional integrated specification to model interdependencies across regions; our results indicate that while global decreases in public investment have a homogeneously negative effect on the output of all Spanish regions, these regions portray heterogeneous resp from localized public capital stock reductions over the simulation period considered.

Original languageEnglish (US)
Pages (from-to)129-146
Number of pages18
JournalRegion
Volume4
Issue number1
DOIs
StatePublished - Jan 17 2017

Keywords

  • Multiregional
  • Public capital stock
  • Regional investment
  • Spain
  • Spatial econometrics
  • Spillovers
  • Vector autoregressions

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Economics and Econometrics

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