Abstract

HERNANDEZ MOTA, José Luis  and  MARIN MEDRANO, Iván Abdel. Sustainable Financing of Public Investment: Evidence for Mexico, 1990-2019. Finanz. polit. econ. [online]. 2021, vol.13, n.1, pp.43-75.  Epub July 02, 2021. ISSN 2248-6046.  https://doi.org/10.14718/revfinanzpolitecon.v13.n1.2021.3.

This paper aims to analyze public investment spending with sustainable external financing. The theoretical section examines solvency and fiscal compliance conditions that allow determining a rule for sustainable debt accumulation with a public investment policy. Empirically, a fiscal reaction function is estimated, which validates the hypothesis of positive effects of the implementation of the rule on primary balance and physical budgetary investment for the period 1990:I-2019:IV. The results suggest discussing the relevance of modifying debt and public spending policy in order to stimulate economic activity.

Keywords : public debt; public investment; sustainability; fiscal rules.

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