Public Investment and Unegalitarian Equilibrium

Nobuhiro Okuno

Public Finance = Finances publiques, 1986, vol. 41, issue 2, 260-66

Abstract: Effects of public investment on income-wealth distribution is analyzed using a neoclassical growth model with income-wealth inequalities. The author considers income groups that differ in their wealth holdings but have the same strictly convex savings function. A neoclassical growth model with these features has a locally stable unegalitarian equilibrium. The author makes some comparative analyses of unegalitarian steady paths with respect to public investment. It is shown that public investment is likely to expand income-wealth inequality even though it raises per capita national income.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:pfi:pubfin:v:41:y:1986:i:2:p:260-66

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