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Competitive Exchange Rate and Public Infrastructure in a Macrodynamic of Economic Growth

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  • Antonio Soares Martins Neto
  • Gilberto Tadeu Lima

Abstract

We develop a dual open-economy model which incorporates a flow of public infrastructure as a factor of production to investigate effects of a competitive exchange rate policy under different levels of provision of public infrastructure. It is suggested that an exchange rate policy coordinated with a public infrastructure policy should produce better results. By increasing productivity in the tradable sector and by reducing inflationary pressures, this supply-side public policy contributes to the success of an economic growth strategy led by a competitive currency.
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  • Antonio Soares Martins Neto & Gilberto Tadeu Lima, 2017. "Competitive Exchange Rate and Public Infrastructure in a Macrodynamic of Economic Growth," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 792-815, November.
    • Handle: RePEc:bla:metroe:v:68:y:2017:i:4:p:792-815
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    5. Fraga, Jefferson Souza & Resende, Marco Flávio da Cunha, 2022. "Infrastructure, conventions and private investment: An empirical investigation," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 351-361.

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    More about this item

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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