IMF Working Papers

Public Investment as a Fiscal Stimulus: Evidence from Japan’s Regional Spending During the 1990s

By Anita Tuladhar, Markus Bruckner

April 1, 2010

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Anita Tuladhar, and Markus Bruckner. Public Investment as a Fiscal Stimulus: Evidence from Japan’s Regional Spending During the 1990s, (USA: International Monetary Fund, 2010) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

How effective was public investment in stimulating the Japanese economy during the economic stagnation of the 1990s? Using a dataset of regional public investment spending, we find that investment multipliers were higher than for public consumption, although they were relatively low and declining over time. The paper also finds that the effectiveness of economic infrastructure investment, implemented mainly by the central government, is lower than that of social investment mostly undertaken by local governments. These results suggest that while public investment may yield higher output effects than other spending, its effectiveness depends upon its composition, the level of government implementation, and supply side factors.

Subject: Expenditure, Private investment, Public debt, Public investment spending, Revenue administration

Keywords: Government expenditure, Government investment, Multiplier estimate, Multipliers Across Prefectures, WP

Publication Details

  • Pages:

    34

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2010/110

  • Stock No:

    WPIEA2010110

  • ISBN:

    9781455200696

  • ISSN:

    1018-5941

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