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 InfoPaper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 75.
Length: 22 pages
Date of creation: Sep 1999
Date of revision:
Publication status: Published in Journal of Monetary Economics, Volume 41, Issue 2, 27 February 1998, Pages 319-331
Other versions of this item:
- 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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