Economic growth has been extensively studied in the literature since last century. Seminal papers of Achauer (1989a-d) investigated the relation between economic growth and government expenditure. In the same way and using the works of Balvir and Balbir (1984) and Granger Causality test (1980), we aim at identifying a relationship from investments in transportation infrastructure to GDP and vice-versa in the period 1950-2004 in Brazil. As a result, we confirm the hypothesis that investments in road infrastructure imply increasing the GDP and vice-versa, but railroad investments do not have effects on the economy. The results indicate that investments in road infrastructure imply faster returns in growth in GDP than railroad investments.
economic growth; transportation infrastructure; Granger causality test