Modeling the Macroeconomic Impact of Construction Spending as a Public Policy Tool - the Case of Employment
Abstract
Construction is considered as one of the largest industries in the United States and Worldwide and its impact on the national and global economies as well as the value it adds cannot be overstated. This important role dictates a special investigation of the nature of that relationship between the construction sector and the economy with the objective of providing academics and policy-makers with a deeper insight into the specifics of such relationship. A major portion of this research focuses primarily on one aspect of the relationship between construction spending and the economy, namely employment. This is achieved through the use of econometric time-series analysis techniques in order to investigate and model that relationship and also to facilitate capturing any causal short- and long-run relationships. The econometric techniques adopted in this research include ARIMA, ARIMAX and Vector Error Correction Modeling. Moreover, as an initial step towards developing full-fledged simulation models that can aid in estimating the impact of construction spending on the economy, this research presents a view of construction as a complex system-of-systems highlighting its inherent complexity and the interdependencies between its components. It further presents a system dynamics model that simulates the process of employment based on the market search theory, which can serve as the foundation of a comprehensive system dynamics model that links all key aspects of the economy.
Degree
Ph.D.
Advisors
Kandil, Purdue University.
Subject Area
Economics|Civil engineering
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