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Public Capital, Income Distribution and Growth

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Author Info
Getachew, Yoseph () (UNU-MERIT)

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Abstract

Public capital investment plays an important role in long run growth through enhancing productivity and complementing the accumulation of private inputs. Under appropriate conditions, public capital could also have important implications for income distribution dynamics. When the credit market is imperfect and there are diminishing returns to private factors, income inequality is negatively related to economic growth. The dynamics of income distribution is determined by relative income shares of private input, wherever initial endowment differs among individuals. Therefore, if the provision of public capital has an effect on relative income shares of private inputs, then it will have an effect on income distribution dynamics. In this case, public capital once more becomes an important determinant of long-run growth through its indirect effect on income distribution. The paper studies this and other interesting issues with respect to public capital, income inequality and economic growth.

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File URL: http://www.merit.unu.edu/publications/wppdf/2008/wp2008-056.pdf
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Publisher Info
Paper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number 056.

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Date of creation: 2008
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Handle: RePEc:dgr:unumer:2008056

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Web page: http://www.merit.unu.edu

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Related research
Keywords: Income Distribution; Public Capital; Economic Growth;

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hall, Andy & Sulaiman, Rasheed & Bezkorowajnyj, Peter, 2008. "Reframing technical change: Livestock Fodder Scarcity Revisited as Innovation Capacity Scarcity: Part 3. Tools for Diagnosis and Institutional Change in Innovation Systems," UNU-MERIT Working Paper Series 004, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  2. Maliranta, Mika & Mohnen, Pierre & Rouvinen, Petri, 2008. "Is Inter-Firm Labor Mobility a Channel of Knowledge spillovers? Evidence from a Linked Employer-Employee Panel," UNU-MERIT Working Paper Series 005, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
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  3. Hall, Andy & Sulaiman, Rasheed & Bezkorowajnyj, Peter, 2008. "Reframing technical change: Livestock Fodder Scarcity Revisited as Innovation Capacity Scarcity: Part 2. A Framework for Analysis," UNU-MERIT Working Paper Series 003, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  4. Soete, Luc, 2008. "Science, Technology and Development: Emerging concepts and visions," UNU-MERIT Working Paper Series 001, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  5. Hall, Andy & Sulaiman, Rasheed & Dhamankar, Mona & Bezkorowajnyj, Peter & Prasad, Leela, 2008. "Reframing technical change: Livestock Fodder Scarcity Revisited as Innovation Capacity Scarcity: Part 1. A Review of Historical and Recent Experiences," UNU-MERIT Working Paper Series 002, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  6. Lokshin, Boris & Gils, Anita van & Bauer, Eva, 2008. "Crafting Firm Competencies to Improve Innovative Performance," UNU-MERIT Working Paper Series 009, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  7. Goedhuys, Micheline & Janz, Norbert & Mohnen, Pierre, 2008. "Knowledge-based productivity in low-tech industries: evidence from firms in developing countries," UNU-MERIT Working Paper Series 007, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  8. Sybrand Schim van der Loeff & Pierre Mohnen & Franz Palm & A. Tiwari, 2008. "Financial Constraints and other Obstacles: Are they a Threat to Innovation Activity?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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