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Growth Effects of Public Investment and Public Consumption: The Role of the Business Cycle, Fiscal Space, and Efficiency

Orador convidado

João Jalles (ISEG)


Room (-1.01) EEG & Online


Início27.10.2023 13:15Fim27.10.2023 14:15

Resumo do evento


João Tovar Jalles is an Economist, University Professor and Consultant. Currently he is Assistant Professor of Macroeconomics at ISEG – University of Lisbon. Before he was a Senior Economist at the Portuguese Public Finance Council. Previously he spent 5 years at the IMF: 1 year in the Research Department and 4 years in the Fiscal Affairs Department, where he participated in numerous negotiation, review and technical assistance missions.

Before joining the Fund, João was an Economist at the OECD’s Economics Department and before that a Fiscal Economist at the ECB’s Fiscal Policies Division.

João was a Visiting Scholar at the IMF’s Research Department and a Visiting Researcher at the Bank of Portugal’s Research Department. He also has acted as consultant and expert to national and international organizations on several ocasions.


The paper analyzes the growth impact of public spending, differentiating between public investment and consumption shocks. To this end we develop a new measure of public spending shocks based on cyclically adjusted government investment and consumption data. Estimations using local projections based on a global sample of countries over the period 1980-2021 suggest that public investment shocks play a much greater role in boosting economic growth in comparison with public consumption shocks. Public investment multipliers also tend to be greater during recessions and in countries with greater fiscal space and higher public investment efficiency. While public investment shocks have a strong effect, on average, on economic growth in emerging market and developing economies, the impact is heterogeneous across countries. In particular, public spending multipliers are not significant in energyexporting countries.

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