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Public consumption composition in a growing economy

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  • Censolo, Roberto
  • Colombo, Caterina

Abstract

This paper explores the role of the composition of public consumption within a three sector R&D growth model. A competitive industry supplies a homogeneous good and a monopolistic sector manufactures a composite commodity differentiated in many varieties, whose size can be increased through investment in R&D. We investigate the effects of changes in the level and in the composition of public consumption on the steady state and on the economy's transitional dynamics. By varying the aggregate composition of demand, the government can effectively move resources away from the traditional industry to foster innovation. Welfare effects are also evaluated. We show that the composition of government consumption affects the entire time path of utility.

Suggested Citation

  • Censolo, Roberto & Colombo, Caterina, 2008. "Public consumption composition in a growing economy," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1479-1495, December.
  • Handle: RePEc:eee:jmacro:v:30:y:2008:i:4:p:1479-1495
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    References listed on IDEAS

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    Cited by:

    1. repec:rsr:supplm:v:65:y:2017:i:2:p:122-129 is not listed on IDEAS
    2. Simon Wiederhold, 2009. "Government Spending Composition in a Simple Model of Schumpeterian Growth," Jena Economic Research Papers 2009-101, Friedrich-Schiller-University Jena.
    3. repec:rsr:supplm:v:65:y:2017:i:3:p:169-181 is not listed on IDEAS
    4. Carine Meyimdjui, 2017. "Food Price Shocks and Government Expenditure Composition: Evidence from African Countries," Working Papers halshs-01457366, HAL.
    5. Carine MEYIMDJUI, 2017. "Food Price Shocks and Government Expenditure Composition: Evidence from African Countries," Working Papers 201703, CERDI.
    6. Simon Wiederhold, 2012. "The Role of Public Procurement in Innovation: Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 43, June.
    7. Constantin Anghelache & Madalina Gabriela Anghel & Marius Popovici, 2015. "Multiple Regressions Used in Analysis of Private Consumption and Public Final Consumption Evolution," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(4), pages 69-73, October.
    8. repec:rsr:supplm:v:65:y:2017:i:2:p:105-113 is not listed on IDEAS
    9. Constantin ANGHELACHE & Alexandru MANOLE & Mădălina-Gabriela ANGHEL, 2017. "Macroeconomic models used in structural analysis of GDP," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 197-206, Spring.
    10. Mario G.R. Pagliacci & Constantin Anghelache & Alexandru Manole & Madalina Gabriela Anghel, 2016. "The Econometric Model for the Economic and Financial Analysis of Romanian International Trade," Romanian Statistical Review, Romanian Statistical Review, vol. 64(3), pages 53-66, September.
    11. repec:rsr:supplm:v:65:y:2017:i:3:p:189-196 is not listed on IDEAS
    12. repec:agr:journl:v:xxiv:y:2017:i:1(610):p:197-206 is not listed on IDEAS
    13. repec:rsr:supplm:v:65:y:2017:i:10:p:123-131 is not listed on IDEAS

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