Finally shortterm plans for infrastructure investment

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Unformatted text preview: * [0.114474] 10 160 0.027987 [0.155761] 0.029068 [0.158015] ‐0.004229 [0.006899] 0.011017 [0.011159] 0.665810*** [0.166286] 10 160 0.188266 [0.132233] 0.187705 [0.133485] ‐0.012773** [0.005393] ‐0.013397 [0.009359] 0.880947*** [0.094710] 10 160 ‐0.145566*** [0.021507] ‐0.144717*** [0.021755] 0.001114 [0.001291] ‐0.001317 [0.002264] 0.207247*** [0.069091] 10 180 ‐0.224928*** [0.022241] ‐0.224477*** [0.022488] 0.00126 [0.001329] 0.00063 [0.002324] 0.168877*** [0.062152] 10 180 ‐0.079714*** [0.009787] ‐0.080097*** [0.009890] ‐0.000046 [0.000548] 0.000448 [0.000985] 0.126472* [0.065995] 10 180 Primary Balance I. All LAC Countries Output gap, 1990‐2002 Output gap, 2003‐2008 Govt Debt, 1990‐2002 Govt Debt, 2003‐2008 Lagged fiscal indicator No. Countries No. Observations II. LAC 7 Countries (a) Output gap, 1990‐2002 Output gap, 2003‐2008 Govt Debt, 1990‐2002 Govt Debt, 2003‐2008 Lagged fiscal indicator No. Countries No. Observations III. Rest of LAC (b) Output gap, 1990‐2002 Output gap, 2003‐2008 Govt Debt, 1990‐2002 Govt Debt, 2003‐2008 Lagged fiscal indicator No. Countries No. Observations Primary Balance Cyclically‐adjusted Government Revenues Standard errors in brackets *** p<0.01, ** p<0.05, * p<0.1 (a) LAC 7 countries include Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. (b) Rest of LAC includes Bolivia, Costa Rica, Ecuador, Guatemala, Honduras, El Salvador, Nicaragua Panama, Paraguay, and Uruguay. 107 Primary Expenditure Primary Balance Automatic stabilizers Government Revenues Primary Expenditure 6. CRISIS IN LAC: INFRASTRUCTURE INVESTMENT AND THE POTENTIAL FOR EMPLOYMENT GENERATION Laura Tuck, Jordan Schwartz and Luis Andres May 2009* Abstract Infrastructure investment is a central part of the stimulus plans of the LAC region as it confronts the growing financial crisis. This paper estimates the potential effects on direct, indirect, and induced employment for different types of infrastructure projects with LAC‐specific variables. The analysis finds that the direct and indirect short‐term employment generation potential of infrastructure capital investment projects may be considerable—averaging around 40,000 annual jobs per US$1billion in LAC, depending upon such variables as the mix of subsectors in the investment program; the technologies deployed; local wages for skilled and unskilled labor; and the degrees of leakages to imported inputs. While these numbers do not account for substitution effect, they are built around an assumed “basket” of investments that crosses infrastructure sectors most of which are not employment‐maximizing. Albeit limited in scope, rural road maintenance projects may employ 200,000 to 500,000 annualized direct jobs for every US$1billion spent. The paper also describes the potential risks to effective infrastructure investment in an environment of crisis including sorting and planning contradictions, delayed implementation and impact, affordability, and corruption. Introduction: Latin America and the Caribbean’s Stimulus Packages As of February 2009, the largest economies in Latin America a...
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This document was uploaded on 11/14/2013.

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