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Public infrastructure, non-cooperative investments and endogenous growth
[Comportements non-coopéeratifs en matièere d’investissement dans les infrastructures publiques et croissance endogèene]

Author

Listed:
  • Charles C. Figuieres

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Fabien Prieur

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Mabel Tidball

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

Abstract

Two countries strategically invest in productive infrastructure within a general equilibrium model with endogenous growth. These public investments generate externalities. Dynamic analysis reveals that: (1) under constant returns, the two countries' growth rates differ during the transition but are identical on the balanced growth path, (2) a country with decreasing returns can experience sustained growth provided that the other country grows at a positive constant rate, (3) cooperation does not necessarily lead to higher growth for each country, and it can increase or decrease the gap between countries' growth rates depending on the countries' consumption preferences regarding domestic and foreign goods.

Suggested Citation

  • Charles C. Figuieres & Fabien Prieur & Mabel Tidball, 2013. "Public infrastructure, non-cooperative investments and endogenous growth [Comportements non-coopéeratifs en matièere d’investissement dans les infrastructures publiques et croissance endogèene]," Post-Print hal-02645736, HAL.
    • Handle: RePEc:hal:journl:hal-02645736
    DOI: 10.1111/caje.12024
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    Cited by:

    1. Rym Aloui & Aurélien Eyquem, 2020. "The Welfare Gains of Cooperative Public Infrastructure Policies: A Trade and Supply-Side View," Annals of Economics and Statistics, GENES, issue 140, pages 27-44.
    2. Akihiko Yanase & Makoto Tawada, 2017. "Public infrastructure for production and international trade in a small open economy: a dynamic analysis," Journal of Economics, Springer, vol. 121(1), pages 51-73, May.
    3. Soldatos, Gerasimos T., 2014. "Local Taxation, Private-Public Consumption Complementarity, and the Optimal Number of Jurisdictions," MPRA Paper 60861, University Library of Munich, Germany.
    4. Rym Aloui & Aurélien Eyquem, 2020. "The Welfare Gains of Cooperative Public Infrastructure Policies: A Trade and Supply-Side View," Annals of Economics and Statistics, GENES, issue 140, pages 27-44.
    5. Charles Figuières & Fabien Prieur & Mabel Tidball, 2013. "Public infrastructure, noncooperative investments, and endogenous growth," Canadian Journal of Economics, Canadian Economics Association, vol. 46(2), pages 587-610, May.
    6. Akihiko Yanase & Ngo Van Long & Ngo Van Long, 2020. "Trade Costs and Strategic Investment in Infrastructure in a Dynamic Global Economy with Symmetric Countries," CESifo Working Paper Series 8707, CESifo.
    7. Guo, Lu & Yan, Chong, 2021. "Optimal Taxation in the Endogenous Growth Framework with the Private Information," MPRA Paper 109548, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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