Public investment model

  • Here, Government makes investments in specific goods and services, with the help of Public sector
  • The investment for revenue mainly comes from taxes
  • Properly targeted public investment can do much to boost economic performance, generating aggregate demand quickly, fuelling productivity growth by improving human capital, encouraging technological innovation, and spurring private-sector investment by increasing returns
  • Though public investment cannot fix a large demand shortfall overnight, it can accelerate the recovery and establish more sustainable growth patterns