The paper studies the dynamic output effects of public infrastructure investment in a small open economy. We develop an … overlapping generations model that includes a production externality of public capital and a wealth effect on labor supply. Public … conventional results obtained from hysteretic models, we find non-monotonic output dynamics of a public investment impulse in the …

households consume final goods, supply labor, and save part of their income.Amongst the findings for a permanent rise in public … consumption under various financing methods.To this end, a dynamic macroeconomic model for a closed economy is developed, which … features a perfectly competitive final goods sector and a monopolistically competitive intermediate goods sector.Finitely lived …