Did public investment crowd out private investment in India?
Publication dateJul, 2020
DetailsNIPFP Working Paper No. 312
AuthorsHoney Karun, Hrishikesh Vinod, and Lekha S. Chakraborty
Our paper uses the ME (Maximum Entropy) bootstrap method to overcome the econometric constraints of using a short time series after the publication of a new macroeconomic series in India. We use a short time series (quarterly data) of stationary and nonstationary variables between 2011-2016 to confirm the positive role of public infrastructure investment. The significant result has policy implications in terms of the current debate, whether public investment ‘crowds-in’ rather than ‘crowds-out’ private corporate investment in India.
JEL Classification: E62, C32, H62