A Study on the Economic Effects of Expressways in Korea

摘要

In Korea, the public investment on social infrastructure has been a key policy instrument toprime the pump to improve the economy whenever its industrial output growth and privateconsumption appear to slow down. Over the last decade, Korean economy has experienced asharp downfall owing to the economic crisis in the late 1990s. The fact that total amount of SOCinvestment has been steadily increased since the economic crisis of 1997 explains Koreaneconomy’s making a rapid recovery. As stated in the textbook of the economics, the SOCinvestment expansion could be used as a pump priming policy and every government in theworld has actually recoursed to it. But the link between investing in road (especially expressway)capital and productivity has not been systematically analyzed.In this paper we analyze how the construction or investment on the roads (roads ingeneral/expressways) has contributed to Korean economy. We adopt the method of ‘an interindustryanalysis’ in order to estimate the various effects designated by the econometriccoefficients. We use the data of seven Korean Input-Output (IO) Tables reported every five years.Through the analysis, we show that the contribution of the expressway capital, representative ofthe road investment to TFP growth is positive in principal industries, and its economic impacthas been very deep and broad compared to the OECD countries.