When do public transport investments really matter? A CGE analysis for Türkiye

Abstract

In this study, the economic impact of public transport investments which have been extensively used as an investment policy tool in Türkiye is analysed from different fiscal policy and financing perspectives by employing a dynamic computable general equilibrium (CGE) model. The impact of public transport investments on key economic performance indicators of real GDP growth and unemployment and macroeconomic vulnerability indicators were investigated in alternative scenarios involving such different financing mechanisms as tax revenues, external borrowing, and public–private partnerships. The results assert that public transport investments stimulate economic growth and employment. Nevertheless, the financing mechanism is an essential factor that determines the level of the impact, its sustainability and in some cases its direction.

KEYWORDS:

• Public transport investments
• computable general equilibrium analysis
• economic growth
• macroeconomic vulnerability
• public–private partnerships

Acknowledgments

This article is extracted from and extends the results of the PhD Dissertation of the Author titled: “Analysis of the economic impact of public transport infrastructure investment expenditures and alternative finance methods: A computable general equilibrium analysis application for Turkey” (originally in Turkish), accepted in 2019.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 In this study, public transport investment refers to the transport investments financed by public funds.