Effects of investments in transportation infrastructure on economic growth in Brazil
International Journal of Development Research
Effects of investments in transportation infrastructure on economic growth in Brazil
Received 20th December, 2020; Received in revised form 14th December, 2020; Accepted 07th January, 2021; Published online 28th February, 2021
Copyright © 2021, Paulo Henrique Cirino Araújo and Willer Luciano Carvalho. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
This paper investigates the effect of investments in transportation infrastructure on Brazilian economic growth over the period from 2000-2016. The theoretical approach is based on the Solow Growth model.This model explains that economic growth is decomposed into capital, education, and technology investment shocks.The estimation of the effect of these shocks on GDP growth in Brazil was using the Error Correction Mechanism Vector Model (VECM).The econometric results show a bidirectional relationship between investment in transportation infrastructure and economic growth.This endogeneity among the time series was verified by the Granger test.In general, the shocks of transportation investments in Brazil are statistically significant and persist in GDP growth for up to 6 years.
