This paper addresses the issue of whether and by how much public investment or public capital can enhance economic performance. In comparison with the literature on the subject, we apply many different methodologies to answer these questions. A VAR model (for France, Italy, Germany, the UK and...

Bajo-Rubio O. and Diaz-Roldan C. (2005) Optimal endowments of public capital: an empirical analysis for the Spanish regions, Regional Studies 39 , 297-304. Regional infrastructure policies, through increased public investment, are widely used to promote the development of poorer regions in...

The paper presents a theoretical analysis of the relationship between privatization and public deficit finance. We examine the optimal magnitude of public asset sales and the extent to which privatization can be used to reduce taxes, or, to retire public debt, for two cases. In the first,...

Standard introductory textbook authors assert that an increase in government spending expands aggregate demand in the short run but also raises the interest rate and, thus, crowds out private investment in the long run. Because the decrease in investment results in a smaller capital stock,...

The relationship between public investment and economic is one of the most highly debated issues in economic policy circles in recent years. This topic has been analyzed from several approaches, both from a theoretical and empirical perspective. In this paper we present a survey of the main...

Barro-type endogenous growth models propose a nonmonotonic relationship between productive public spending and growth. Under this so-called nonlinearity hypothesis the size and direction of growth effects due to an increase in public spending depend on the share of public spending in GDP....

We examine a two country world. We endow each of the countries with externalities from both private and public capital that enable endogenous growth. We show conditions under which an equilibrium exists where both economies grow at constant but different rates.

This paper presents an endogenous growth model with public capital and public debt. The primary-surplus-to-GDP ratio is set such that it is a positive function of the debt ratio, which is a necessary condition for the intertemporal budget constraint of the government. The paper studies growth...

This paper presents and analyzes an endogenous growth model with public capital and progressive taxation. Two versions are considered: The first version assumes that the budget of the government is balanced at each point of time. The second allows for public debt but asserts that the ratio of...