5 Conclusion
In this paper we have used a VAR analysis for 17 countries OECD between 1960 and 2014 to assess the effects of public and private investment in terms of economic growth, crowding-out and crowding-in. In that context, we have also computed public and private investment macroeconomic rates of return, and assessed the potential effect of the 2008–2009 economic and financial crisis. Our results for the effects of investment shocks show that:
i) public investment had a positive growth effect in most countries;
ii) public investment had a contractionary effect on output in five cases (Finland, UK, Sweden, Japan, and Canada);
iii) positive public investment impulses led to a decline in private investment (crowdingout) in six countries (Belgium, Ireland, Finland, Canada, Sweden, the UK);
iv) public investment had a crowding-in effect on private investment in the remainder 11 countries;
v) private investment had a positive growth effect in all countries;
vi) private investment crowds-out public investment in the cases of Belgium, and Sweden;
vii) private investment crowds-in public investment in the remainder 15 countries;
viii) the results for the crowding-in and crowding-out effects, together with the macro rates of returns are essentially robust to the ordering of private and public investment in the VAR set up
