Public Capital and Economic Growth: Issues of Quantity, Finance, and Efficiency
In: Economic Development and Cultural Change, Band 48, Heft 2, S. 391-406
ISSN: 1539-2988
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In: Economic Development and Cultural Change, Band 48, Heft 2, S. 391-406
ISSN: 1539-2988
Investment in infrastructure is necessary for a strong, flexible, and growing economy. However, the relationship between public capital and economic growth is not linear. At a certain level, the tax burden associated with financing and maintaining public capital reduces the returns to private industry, which in turn reduces growth; also, different types of spending have different effects on growth. The short- and long-term growth-maximizing effects of public investment increase as the ratio of public to private capital stock rises to an optimal level (found to be about 61 percent); above that level, the growth effects decrease. The public-to-private ratio is below the optimal level throughout much of the country and government spending is not always directed toward the types of investment that have the most positive effects on growth. Good economic policy requires both increasing the public capital stock and reorienting government spending from consumption to investment in physical capital stock.
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In: Policy studies journal: an international journal of public policy, Band 21, Heft 2, S. 380-390
ISSN: 0190-292X
In: Challenge: the magazine of economic affairs, Band 34, Heft 2, S. 39-45
ISSN: 1558-1489
In: Contemporary economic policy: a journal of Western Economic Association International, Band 8, Heft 4, S. 30-46
ISSN: 1465-7287
This paper develops and implements a neoclassical model of fiscal policy. The paper's main empirical hypothesis is that government non‐military investment spending is more expansionary than is either government consumption or military investment. The paper utilizes annual data to support the hypothesis. It finds that output "multipliers" for government non‐military investment significantly exceed unity while multipliers for government consumption and military investment lie below unity. The paper also finds that public sector deficits—both actual and cyclically adjusted—contain minor explanatory power for output when one controls for the effects of non‐military investment.
In: Journal of Monetary Economics, Band 24, Heft 2, S. 171-188
In: Journal of Monetary Economics, Band 23, Heft 2, S. 177-200
In: Carnegie Rochester Conference series on public policy: a bi-annual conference proceedings, Band 23, S. 91-138
ISSN: 0167-2231