Should public capital be subsidized or provided?
AbstractIn an endogenous-growth model, we consider alternative ways of providing public capital using distortionary taxes. We show that if the government provides the good, the resulting growth rate and welfare may or may not be higher than under laissez-faire. By contrast, if the government subsidizes private providers, not only are growth and welfare higher than under public provision, they are also unambiguously higher than under laissez-faire.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Monetary Economics.
Volume (Year): 41 (1998)
Issue (Month): 2 (April)
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Web page: http://www.elsevier.com/locate/inca/505566
Other versions of this item:
- Shantayanan Devarajan & Danyang Xie & Heng-fu Zou, 1999. "Should Public Capital Be Subsidized or Provided?," CEMA Working Papers 75, China Economics and Management Academy, Central University of Finance and Economics.
- Shantayanan Devarajan & Danyang Xie & Heng-Fu Zou, 2002. "Should Public Capital Be Subsidized or Provided?," Macroeconomics 0212005, EconWPA.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H4 - Public Economics - - Publicly Provided Goods
- H5 - Public Economics - - National Government Expenditures and Related Policies
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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