Using data for both the US and Canada, I examined private and public investment during the last four decades to determine what support there is, if any, for the crowding in hypothesis. Based on neo-classical theories of investment, simple VAR models of private and public investment behaviour are used to examine the short- and long-run interactions between these variables. For both countries there is no evidence of crowding in due to complementarities between public and private investment; in fact, innovations to public investment tend to crowd out private investment. © 2002 Elsevier Science B.V. All rights reserved.
CITATION STYLE
Voss, G. M. (2002). Public and private investment in the United States and Canada. Economic Modelling, 19(4), 641–664. https://doi.org/10.1016/S0264-9993(00)00074-2
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