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A Comparative Analysis of Funding Schemes for Public Infrastructure Spending in Quebec

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Author Info

  • Dorothée Boccanfuso

    ()
    (Département d'économique and GRÉDI, Université de Sherbrooke)

  • Marcelin Joanis

    ()
    (Département d'économique and GRÉDI, Université de Sherbrooke)

  • Patrick Richard

    ()
    (Département d'économique and GRÉDI, Université de Sherbrooke)

  • Luc Savard

    ()
    (Département d'économique and GRÉDI, Université de Sherbrooke)

Abstract

The economic literature has been investigating the positive relation between public infrastructure spending and the productivity of the private sector since Munnell (1992). We have introduced this relationship into a recursive dynamic computable general equilibrium model of the Quebec economy to investigate various funding schemes to scale up infrastructure spending in the province. We draw our assumptions from Estache et al. (2010) combined with sectoral elasticity parameters. We conduct a comparative analysis where the funding comes from debt alone, and debt with sales tax, income tax and business tax. Our main finding is that the income tax seems to produce the most positive effects and the businesses tax the most negative effects, though differences are small.

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Bibliographic Info

Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 12-10.

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Length: 34 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:shr:wpaper:12-10

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Keywords: CGE model; infrastructure; productivity;

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