Public infrastructure for production and international trade in a small open economy: a dynamic analysis

Akihiko Yanase () and Makoto Tawada ()
Additional contact information
Makoto Tawada: Aichi Gakuin University

Journal of Economics, 2017, vol. 121, issue 1, No 3, 73 pages

Abstract: Abstract This paper develops a dynamic trade model with a stock of public infrastructure, which has a property of “unpaid factor of production”. We show that a country with a smaller (larger) labor endowment tends to become an exporter of a good whose productivity is more (less) sensitive to the stock of public infrastructure. We also show that after the opening of trade, the labor-scarce country becomes unambiguously better off but the labor-abundant country may become worse off. Overall, these results contrasts with those obtained in the case of public intermediate goods with a “creation of atmosphere” property.

Keywords: Semi-public intermediate good; Dynamic Lindahl pricing; Trade patterns; Long-run production possibility frontier; Gains or losses from trade (search for similar items in EconPapers)
JEL-codes: F11 H41 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://link.springer.com/10.1007/s00712-016-0519-z Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:121:y:2017:i:1:d:10.1007_s00712-016-0519-z

DOI: 10.1007/s00712-016-0519-z

Access Statistics for this article

Journal of Economics is currently edited by Giacomo Corneo

More articles in Journal of Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().