Download or read book The Welfare Multiplier of Public Infrastructure Investment written by Mr.Giovanni Ganelli and published by International Monetary Fund. This book was released on 2016-02-29 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the welfare multipliers of public spending (the consumption equivalent change in welfare for one dollar change in public spending) in a DSGE model. The welfare multipliers of public infrastructure investment are positive if infrastructure is sufficiently effective. When the medium-term output multipliers are consistent with the empirical estimates (1-1.4), the welfare multiplier is 0.8. That is, a dollar spent by the government for investment raises domestic welfare by equivalent of 0.8 dollars of private consumption. This suggests that the welfare gains of public infrastructure investment, if chosen wisely, may be substantial.