This paper uses a dynamic general equilibrium model calibrated to Ugandan data to examine the welfare effects of alternative scenarios of government expenditure and tax financing. Two expenditure types are considered: social spending that affects human capital, and infrastructure expenditures...

In this article we present an endogenous growth model with productive public investment in infrastructure capital. Further, we suppose that the government pays lump-sum transfers to the household and subsidizes private investment. First, we demonstrate that there exists a unique balanced growth...

This paper develops a theoretical framework for understanding the mechanism through which foreign aid affects macroeconomic performance. We find that the long-run impact of an aid program and the nature of the transitional dynamics it generates depend crucially on (i) the elasticity of...

The paper develops a theoretical framework for understanding the mechanism through which foreign aid affects macroeconomic performance. The authors find that the long-run impact of an aid program and the nature of the transitional dynamics it generates depend crucially on (i) the elasticity of...

In the past three decades, developing countries have made significant economic and social progress, from improved infant mortality rates to higher life expectancy. Yet, 1.3 billion people continue to live in extreme poverty in the developing world, leading policymakers to place a renewed...

This paper studies the difference between public production and public finance of public goods in a dynamic general equilibrium setup. By public finance, we mean that the public good is produced by private providers with the government financing their costs. When the model is calibrated to match...