FIGURE 1. Standard model: Permanent increase in public investment with planning delays

Gov. investment increase 2-year time to plan 5-year time to plan Long-term effect

Horizontal axes: quarters; vertical axes: percent deviations from the steady state, except inflation, which is in annualised p.p. deviations from the steady state, and public debt to GDP, which is in p.p. deviations. All variables are in real terms.

Figure 2 shows delays due to construction (time-to-build). As before, the benchmark case, where there are no construction-related delays, is shown in black line and serves as the benchmark against which to compare the two cases with delays. Dashed red line