Financial Effects of Privatizing the Production of Investment Goods

Stefano Bosi () and Carine Nourry
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Stefano Bosi: EPEE, Université d’Evry - Val d’Essonne

No 01-10, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: This paper focuses on a two-sector overlapping generations model with productive capital, where the investment good is jointly provided by government and private …rms. Keeping, for simplicity, the production technologies identical for both sectors, we look at the issue of existence and stability of steady states and we derive some necessary and su¢cient conditions to observe a unique rational expectations equilibrium. In particular we study the real and …nancial e¤ects of privatization. In our very speci…c context, we highlight, by means of numerical simulations, a negative privatization impact on the utility level and the speed of absorbing exogenous shocks

Pages: 39 pages
Date: 2001
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