The Macroeconomic Effects of Operations and Maintenance Costs on Infrastructure

• Main Authors: JU-HSUAN YU, 游濡瑄
• Other Authors: Shu-Chun S. Yang
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/b9p3va

碩士 === 國立中山大學 === 經濟學研究所 === 106 === Public investment is often used as a fiscal policy tool to counteract economic recessions or to promote growth. Most literature on assessing public investment effects, however, ignores operation and maintenance (O&M) costs when computing government spending multliers. This paper follows Chang et al. (2018) to examine the role of O&M costs in the macroeconomic effects of public investment. It finds that when O&M costs are accounted for the long-run cumulative output multiplier is 66% lower than that without including O&M costs. Also, insufficient O&M spending drives up the depreciation rate of public capital, which can substantially undermines the growth effects of public investment.