Azzimonti, Marina; Sarte, Pierre-Daniel; Soares, Jorge - In: Journal of Economic Dynamics and Control 33 (2009) 9, pp. 1662-1681
We characterize the optimal financing of productive public capital and compute the welfare loss from being unable to commit to the Ramsey policy. Because this calculation ultimately relies on numerical approximations, we contrast alternative approaches. While perturbation and linear quadratic...