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Public Infrastructure, Congestion, and Fiscal Policy

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  • John Bennett
  • Phillip Lawler

Abstract

A macro model is developed incorporating the productive effects of public expenditure, but also allowing for congestion. The Pigouvian tax rate to correct for the distortion caused by congestion is found and the optimal level of public expenditure is characterized.

Suggested Citation

  • John Bennett & Phillip Lawler, 2002. "Public Infrastructure, Congestion, and Fiscal Policy," Economics and Finance Discussion Papers 02-01, Economics and Finance Section, School of Social Sciences, Brunel University.
  • Handle: RePEc:bru:bruedp:02-01
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