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Excludable and Non-excludable Public Inputs: Consequences for Economic Growth

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  • INGRID OTT
  • STEPHEN J. TURNOVSKY

Abstract

Non-excludable and excludable public inputs are introduced into an endogenous growth model. We derive the equilibrium growth rate and design the optimal tax and user-cost structure, emphasizing the role of congestion and its consequences for the government's budget. The latter comprises fee and tax revenues that are used to finance the public inputs, although they may generate insufficient revenue to do so entirely. We extend the model to allow for monopoly pricing of the user fee by the government. Most of the analysis is conducted for general production functions consistent with endogenous growth, but the CES technology is also considered. Copyright (c) The London School of Economics and Political Science 2006.

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Bibliographic Info

Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 73 (2006)
Issue (Month): 292 (November)
Pages: 725-748

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Handle: RePEc:bla:econom:v:73:y:2006:i:292:p:725-748

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  1. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October.
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Citations

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Cited by:
  1. Andreas Irmen & Johanna Kühnel, 2008. "Productive Government Expenditure and Economic Growth," Working Papers 0464, University of Heidelberg, Department of Economics, revised May 2008.
  2. Chatterjee, Santanu & Mahbub Morshed, A.K.M., 2011. "Infrastructure provision and macroeconomic performance," Journal of Economic Dynamics and Control, Elsevier, vol. 35(8), pages 1288-1306, August.
  3. George Economides & Apostolis Philippopoulos, 2012. "Are User Fees Really Regressive?," CESifo Working Paper Series 3875, CESifo Group Munich.
  4. Ingrid Ott & Susanne Soretz, 2006. "Regional growth strategies: fiscal versus institutional governmental policies," Working Paper Series in Economics 30, University of Lüneburg, Institute of Economics.
  5. Florian Misch & Norman Gemmell & Richard Kneller, 2013. "Growth and Welfare Maximization in Models of Public Finance and Endogenous Growth," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(6), pages 939-967, December.
  6. Chu, Hsun & Lai, Ching-Chong & Cheng, Chu-Chuan, 2013. "Tax Havens, Growth, and Welfare," MPRA Paper 52878, University Library of Munich, Germany, revised Sep 2013.
  7. Schiffbauer, Marc, 2008. "Catching Up or Falling Behind? The Effect of Infrastructure Capital on Technology Adoption in Transition Economies," Papers DYNREG27, Economic and Social Research Institute (ESRI).
  8. Chatterjee, Santanu & Mahbub Morshed, A.K.M., 2011. "Reprint to: Infrastructure provision and macroeconomic performance," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1405-1423, September.
  9. Bhattacharyya, Chandril, 2014. "A Note on Endogenous Growth with Public Capital," MPRA Paper 55728, University Library of Munich, Germany.
  10. Ingrid Ott & Susanne Soretz, 2006. "Nachhaltige Entwicklung durch endogeneUmweltwahrnehmung," Working Paper Series in Economics 24, University of Lüneburg, Institute of Economics.
  11. Altar, Moisa & Necula, Ciprian & Bobeica, Gabriel, 2008. "Modeling The Economic Growth In Romania. The Influence Of Fiscal Regimes," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(4), pages 146-160, December.
  12. George Economides & Hyun Park & Apostolis Philippopoulos, 2007. "How should the government allocate its tax revenues between productivity-enhancing and utility-enhancing public goods?," Working Papers 2007_40, Business School - Economics, University of Glasgow.
  13. Ingrid Ott & Susanne Soretz, 2006. "Governmental activity and private capital adjustment," Working Paper Series in Economics 26, University of Lüneburg, Institute of Economics.
  14. Benos, Nikos, 2009. "Fiscal policy and economic growth: empirical evidence from EU countries," MPRA Paper 19174, University Library of Munich, Germany.
  15. Mihaela Pintea & Stephen Turnovsky, 2006. "Congestion and Fiscal Policy in a Two-Sector Economy with Public Capital: A Quantitative Assessment," Computational Economics, Society for Computational Economics, vol. 28(2), pages 177-209, September.
  16. Monisankar Bishnu & Chetan Ghate & Pawan Gopalakrishnan, 2013. "Factor income taxation, growth, and investment specific technological change," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 13-04, Indian Statistical Institute, New Delhi, India.
  17. Chetan Ghate & Gerhard Glomm & Jialu Liu, 2012. "Sectoral infrastructure investment in an unbalanced growing economy: The Case of India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 12-07, Indian Statistical Institute, New Delhi, India.

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