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The Crowding Out Effect of Public Investment revisited: A Comparative SVAR Analysis of Sweden and the United States

Huzell, Oscar LU and Nordén, Simon LU (2023) NEKH02 20231
Department of Economics
Abstract
Our study investigates the crowding out effect of public investment on private investment in Sweden and the United States during the period 2005-2019. We present an account of the prevailing theory on the subject and let it inform our subsequent SVAR analysis on quarterly data. We obtain impulse response functions to assess the direction and extent of crowding out or crowding in effects for both countries. Further, we consult the Granger causality test and forecast error variance decomposition analysis to expand our results. Our results indicate that neither effect is prevalent in Sweden and we find evidence for a Crowding out effect in the United States.
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author
Huzell, Oscar LU and Nordén, Simon LU
supervisor
organization
course
NEKH02 20231
year
type
M2 - Bachelor Degree
subject
keywords
Public investment, Private investment, Crowding-out, SVAR
language
English
id
9120605
date added to LUP
2024-11-08 08:27:23
date last changed
2024-11-08 08:27:23
@misc{9120605,
  abstract     = {{Our study investigates the crowding out effect of public investment on private investment in Sweden and the United States during the period 2005-2019. We present an account of the prevailing theory on the subject and let it inform our subsequent SVAR analysis on quarterly data. We obtain impulse response functions to assess the direction and extent of crowding out or crowding in effects for both countries. Further, we consult the Granger causality test and forecast error variance decomposition analysis to expand our results. Our results indicate that neither effect is prevalent in Sweden and we find evidence for a Crowding out effect in the United States.}},
  author       = {{Huzell, Oscar and Nordén, Simon}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Crowding Out Effect of Public Investment revisited: A Comparative SVAR Analysis of Sweden and the United States}},
  year         = {{2023}},
}