Adarov, AmatClements, BenedictJalles, João Tovar2026-04-062026-04-062026-02-220305-9049PURE: 159054088PURE UUID: cbf73ad4-a5c9-4768-b3f0-eede578797c4Scopus: 105032832755WOS: 001722504800001http://hdl.handle.net/10362/202046Publisher Copyright: © 2026 The Author(s). Oxford Bulletin of Economics and Statistics published by Oxford University and John Wiley & Sons Ltd.The paper examines the macroeconomic effects of public investment in emerging market and developing economies (EMDEs). To this end the analysis develops a new measure of public investment shocks based on cyclically adjusted government investment. Estimations using local projections based on a sample of 129 countries over the period 1980–2019 suggest that public investment can significantly boost economic growth, crowd in private investment, and increase productivity and potential output. Estimates suggest that an increase in public investment by 1% of GDP raises real output by 1.1% after 5 years, on average. However, the effects are much larger when public investment spending is efficient and fiscal space is ample—reaching up to 1.6% over the same period. Public investment multipliers tend to be larger during recessions and in capital scarce economies.743568engFiscal multipliersGross fixed capital formationLocal projectionsPublic investmentStatistics and ProbabilitySocial Sciences (miscellaneous)Economics and EconometricsStatistics, Probability and UncertaintySDG 8 - Decent Work and Economic Growthjournal article10.1111/obes.70058https://www.scopus.com/pages/publications/105032832755