Public Infrastructures, Production Organizations, and Economic Development
AbstractWe develop a political economy model of growth to examine economic development led by the interactions between an economic decision concerning a firm’s production technology (CRS vs IRS technology) and a political decision concerning public infrastructures. We show that multiple equilibrium growth paths occur due to differences in expectations regarding the quality of public infrastructures. These multiple paths illustrate why economies with poor initial conditions can catch up to and, furthermore, overtake economies with better initial conditions. Our result could explain the experiences of some East Asian countries where co-evolutions of public infrastructures and industrial transformations spurred economic development.
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Bibliographic InfoPaper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 93.
Length: 35 pages
Date of creation: Aug 2012
Date of revision: Aug 2012
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More information through EDIRC
Public Infrastructure; Political Economy; Production Organization; Overlapping Generations Model;
Other versions of this item:
- Daido, Kohei & Tabata, Ken, 2013. "Public infrastructure, production organization, and economic development," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 330-346.
- H5 - Public Economics - - National Government Expenditures and Related Policies
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-CWA-2012-09-09 (Central & Western Asia)
- NEP-DGE-2012-09-09 (Dynamic General Equilibrium)
- NEP-POL-2012-09-09 (Positive Political Economics)
- NEP-SEA-2012-09-09 (South East Asia)
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