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We develop a model in which public capital is both an engine of growth and a determinant of the distributions of wealth, income, and welfare. Government investment increases wealth inequality over time, regardless of its financing. The time path of income inequality is, however, highly sensitive...
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This paper studies the differences between private and government provision of infrastructure. Capital utilization … decisions and their differential role in determining market prices for capital goods under the two regimes of infrastructure … provision serve as a critical transmission mechanism for fiscal policy. A subsidy to private providers of infrastructure is …
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