Fosu, Augustin KwasiGetachew, YosephZiesemer, Thomas H.W.2016-02-172016-12Fosu, AK, Getachew, Y & Ziesemer, THW 2016, 'Optimal public investment, growth, and consumption : evidence from African countries', Macroeconomic Dynamics, vol. 20, no. 8, pp. 1957-1986.1365-1005 (print)1469-8056 (online)10.1017/S1365100515000206http://hdl.handle.net/2263/51421This paper develops a model positing a nonlinear relationship between public investment and growth. The model is then applied to a panel of African countries, using nonlinear estimating procedures. The growth-maximizing level of public investment is estimated at about 10% of GDP, based on System GMM estimation. The paper further runs simulations, obtaining the constant optimal public investment share that maximizes the sum of discounted consumption as between 8.1% and 9.6% of GDP. Compared with the observed end-of-panel mean value of no more than 7.26%, these estimates suggest that there has been significant public underinvestment in Africa.en© 2015 Cambridge University PressPublic investmentEconomic growthNonlinearityPostprint Article