Economic growth and public and private investment returns

We study the macroeconomic effects of public and private investment in 17 OECD economies through a VAR analysis with annual data from 1960 to 2014. From impulse response functions we find that public investment had a positive growth effect in most countries, and a contractionary effect in Finland, UK, Sweden, Japan, and Canada. Public investment led to private investment crowding out in Belgium, Ireland, Finland, Canada, Sweden, the UK and crowding-in effects in the rest of the countries. Private investment has a positive growth effect in all countries; crowds-out (crowds-in) public investment in Belgium and Sweden (in the rest of the countries). The partial rates of return of public and private investment are mostly positive.

Economic growth and individual satisfaction in an agent-based economy

Macro and micro-economic perspectives are combined in an eco- nomic growth model. An agent-based modeling approach is used to develop an overlapping generation framework where endogenous growth is supported by work- ers that decide to study depending on their relative (skilled and unskilled) indi- vidual satisfaction. The micro perspective is based on individual satisfaction: an utility function computed from the variation of the relative income in both space and time. The macro perspective emerges from micro decisions, and, as in other growth models of this type, concerns an important allocative social decision the share of the working population that is engaged in producing ideas (skilled work- ers). Simulations show that production and satisfaction levels are higher when the evolution of income measured in both space and time are equally weighted.