Abstract

This work analyzes the dynamic effects generated by public investments
on private investments in machinery and equipment in Brazil, between 1996 and 2018.
Theories based on the principle of effective demand support the hypothesis formulated
about the complementarity between public and private investments. We have developed an analytical scheme that identifi es the induction channels for public investments for private
ones, through demand and supply sides of the economy. From an empirical point of view,
the work uses the specifi cation of the econometric model of Autoregressive Vectors (VAR)
that allows treating public investments as exogenous to the system. The results show that
an increase in public investments boosts private investments during the analyzed period.

JEL Classification: O11; E22; O23.