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Henry George Theorem in a Dynamic Framework without Accumulation of Public Goods


  • Masamichi Kawano

    () (School of Economics, Kwansei Gakuin University)


The Henry George Theorem, which is originally established in a static model, asserts that the cost of public good provision should be equal to the total revenue of the land rent to achieve the optimal size of population of each region. This paper examines this theorem in a dynamic framework of overlapping generations model, assuming that the government maximizes the sum of the utilities of the generations of finite periods. We show that the optimal path converges to the stationary state, however, it does not stay on it. We derive that the theorem is valid only in the stationary state, and no longer valid along the optimal path.

Suggested Citation

  • Masamichi Kawano, 2012. "Henry George Theorem in a Dynamic Framework without Accumulation of Public Goods," Discussion Paper Series 92, School of Economics, Kwansei Gakuin University, revised Aug 2012.
  • Handle: RePEc:kgu:wpaper:92

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    File Function: First version, 2012
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    References listed on IDEAS

    1. Kanemoto, Yoshitsugu & Ohkawara, Toru & Suzuki, Tsutomu, 1996. "Agglomeration Economies and a Test for Optimal City Sizes in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 10(4), pages 379-398, December.
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    More about this item


    Henry George theorem; local public good; overlapping generations model;

    JEL classification:

    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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