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. Forthcoming 1998. Journal of Monetary Economics.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0212005.
Length: 22 pages
Date of creation: 11 Dec 2002
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Note: Type of Document - PDF; prepared on PC; to print on HP; pages: 22 ; figures: none
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Public Capital; Subsidy; Taxes; Public Provision;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-12-17 (All new papers)
- NEP-CDM-2002-12-17 (Collective Decision-Making)
- NEP-PBE-2002-12-17 (Public Economics)
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