Efficiency in the provision of public and private capital in 15 OECD countries

José E. Boscá, Antonio Cutanda and Javier Escribá
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José E. Boscá: Universidad de Valencia
Antonio Cutanda: Universidad de Valencia
Javier Escribá: Universidad de Valencia

Investigaciones Economicas, 2006, vol. 30, issue 2, pages 207-237

Abstract: In this paper we use a sample of 15 OECD countries to examine whether provision of public and private capital satisfies conditions of intertemporal efficiency over the 1970-1995 period. We find robust evidence that private and public capital have followed criteria of efficient resource allocation in all countries. The estimated output elasticities of private and public capital display little variation across countries, and reach mean values of 0.19 and 0.055. Consequently, average rates of return to both factors are estimated at about 5-5.5%. All along we estimate a positive and significant intertemporal elasticity of substitution of consumption in all countries.

Keywords: Infrastructures; private capital; investment (search for similar items in EconPapers)
JEL-codes: E6 H54 (search for similar items in EconPapers)
Date: 2006

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