Henry George Theorem in a Dynamic Framework without Accumulation of Public Goods

Masamichi Kawano ()
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Masamichi Kawano: School of Economics, Kwansei Gakuin University

No 92, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: The Henry George Theorem, which is originally established in a static model, asserts that the cost of public good provision should be equal to the total revenue of the land rent to achieve the optimal size of population of each region. This paper examines this theorem in a dynamic framework of overlapping generations model, assuming that the government maximizes the sum of the utilities of the generations of finite periods. We show that the optimal path converges to the stationary state, however, it does not stay on it. We derive that the theorem is valid only in the stationary state, and no longer valid along the optimal path.

Keywords: Henry George theorem; local public good; overlapping generations model (search for similar items in EconPapers)
JEL-codes: F11 R51 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2012-08, Revised 2012-08
New Economics Papers: this item is included in nep-dge, nep-pbe and nep-ure
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http://192.218.163.163/RePEc/pdf/kgdp92.pdf First version, 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:92

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