Spatial Competition and Accumulation of Public Capital
This paper examines the effect of public capital accumulation on private sectors' productivity in a general equilibrium model where a public capital, such as a transportation infrastructure, affects households' disutility of moving. The focus is on indirect channels through which it affects the productivity. The study finds that the accumulation of public capital does not necessarily enhance the productivity of private sectors when there are plenty of initial public capital or the productivity of public sectors is low. However, it also finds that there are cases where public capital accumulation improves social welfare even if it reduces the productivity.
|Length:||22,  p.|
|Date of creation:||Aug 2001|
|Date of revision:|
|Note:||August 13, 2001|
|Contact details of provider:|| Postal: 2-1 Naka, Kunitachi City, Tokyo 186-8603|
Web page: http://cis.ier.hit-u.ac.jp/
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- Shantayanan Devarajan & Danyang Xie & Heng-Fu Zou, 2002.
"Should Public Capital Be Subsidized or Provided?,"
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