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Macroeconomic effects of the regional allocation of public capital formation

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  • Alonso-Carrera, Jaime
  • Freire-Serén, María Jesús
  • Manzano, Baltasar

Abstract

This paper proposes a multi-regional, general equilibrium model with capital accumulation to analyze the economic impact of the spatial distribution of public capital formation. This model is calibrated and solved by using data for the Spanish economy in order to simulate some comparative dynamic exercises of fiscal policy changes. These analyses illustrate the role that public investment plays in generating the existing imbalances in regional development. This is done by computing the spillover effects and the opportunity costs of regional distribution of public investment. Finally, two rankings of regional priorities in public investment can be derived: one based on the criterion of reducing regional disparities, and another based on an efficiency criterion.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 39 (2009)
Issue (Month): 5 (September)
Pages: 563-574

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Handle: RePEc:eee:regeco:v:39:y:2009:i:5:p:563-574

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Keywords: Infrastructures Dynamic general equilibrium Regional spillovers;

References

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Citations

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Cited by:
  1. Anca-Stefania Sava & Bogdan-Gabriel Zugravu, 2010. "Analysis of the Correlations Between Public Capital Investments and Economic Development in Romania," Studies and Scientific Researches. Economics Edition, "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences, issue 15.
  2. Patrizio Lecca & Peter McGregor & Kim Swales, 2010. "Balanced Budget Government Spending in a Small Open Regional Economy," Working Papers 1020, University of Strathclyde Business School, Department of Economics.
  3. Halkos, George & Tzeremes, Nickolaos, 2011. "Population density and regional welfare efficiency," MPRA Paper 30097, University Library of Munich, Germany.
  4. Ott, Ingrid & Soretz, Susanne, 2010. "Productive public input, integration and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 538-549, November.
  5. 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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