Economic Impacts of Public Air Transport Investment: A Case Study of Egypt

This paper applies an input-output (I-O) approach and a dynamic computable general equilibrium (CGE) model to examine the economy-wide short- and long-run impacts of an increase in public capital investment in air transport infrastructure. The results of the I-O analysis reveal that air transport has above-average backward linkages with other sectors in the economy, with mining being the most intensive industry in intermediate input demand for air transport. The results of the CGE simulation show that at the macroeconomic level, expanding public air transport stock induces modest growth in GDP, employment, income, consumption, private investment, and trade. The findings show that the estimated impact of air transport investment is lower than estimated in studies on the multiplier effect of the investment using partial equilibrium techniques.

Automated summary

This paper uses an I-O approach and a CGE model to examine the economy-wide impacts of increased public capital investment in air transport infrastructure. The results suggest that air transport has above-average backward linkages with other sectors, particularly the mining industry. At the macroeconomic level, expanding public air transport stock leads to modest growth in GDP, employment, income, consumption, private investment, and trade. The estimated impact of air transport investment is lower than that estimated using partial equilibrium techniques.