Public investment in Brazil and its relationships with business cycles and fiscal regime

Abstract This article examines trends in Brazilian public investments and how they relate to business cycles and fiscal regime. The approach of Auerbach and Gorodnichenko (2012) is used to estimate fiscal multipliers that may change according to the business cycle. Public investment multipliers estimated for Brazil may reach high values during recessions (above 2) and much lower values in booms (at most 0.8). These results support the use of public investments as an instrument of anti-cyclical policy also in addition to the claim that cutting such investments during economic crisis as in the year 2015 has strong unfavorable repercussions. Finally, the article explores the main factors that lie behind the change towards a falling trend of public investments since 2011 with a particular emphasis on the role of the fiscal regime.

摘要 本文考察巴西公共投资的演变趋势，及其与经济周期（business cycles）和财政体制（fiscal regime）的内在关联。本文采用Auerbach与Gorodnichenko（2012）提出的分析框架，对随经济周期动态变化的财政乘数（fiscal multipliers）进行估算。针对巴西的估算结果显示，公共投资乘数在经济衰退期可达较高水平（超过2），而在经济扩张期则相对较低，最高仅为0.8。上述研究结果既支持将公共投资作为反周期政策工具的合理性，同时也印证了2015年经济危机期间削减此类投资会产生严重不利影响的论断。最后，本文探讨了2011年以来巴西公共投资呈下滑趋势背后的核心动因，并重点分析了财政体制所发挥的关键作用。