Effects of general government investment on inflation

The impact of general government investment on inflation depends on a range of factors: the time horizon, the position of the economy in the cycle, the manner of financing, the type and duration of investment and other effects. Government investment – especially when focused on promoting economic growth – has the potential to strengthen the supply side of the economy and generate long-term macroeconomic benefits and growth in living standards. Published as part of Monetary Policy Report – Spring 2024. Authors: Jan Brůha, Karel Musil, Zdeněk Pikhart