This paper examines how publicly provided inputs could affect income distribution. By applying the Newman-Read production function- a generalized Cobb-Douglas production function- to Hicks's idea of the determinant of factor share, such usually complex dynamics remain analytically tractable. The paper shows that whether public capital has an effect on income distribution dynamics depends on its elasticity of substitution to private capital. If the elasticity of substitution of public capital to private capital is greater than unity, then an investment in public capital increases its relative income share and, hence, decreases the private capital share. In such a case, public capital would have a positive impact on income distribution dynamics.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
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
071.
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
This paper has been announced in the following NEP Reports:
References listed on IDEAS 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.: