Public inputs, urban development, and welfare in a developing economy

Jean-Pierre Laffargue (), Chi-Chur Chao and Eden Yu
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Jean-Pierre Laffargue: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: This paper examines the impact of urban development through the government provision of public inputs in a developing economy. When a financing constraint is taken into account, an increase in public inputs may worsen urban unemployment and hence reduce welfare of the economy. Further, the optimal level of public input provision is larger (smaller) than that under full employment, if there exits a positive (negative) employment effect. The theoretical results are confirmed by numerical simulations.

Keywords: Public inputs; Urban unemployment; Welfare (search for similar items in EconPapers)
Date: 2008
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Published in Sugata Marjit & Eden Yu. Contemporary and Emerging Issues in Trade Theory and Policy, Emerald, pp.297-314, 2008, Frontiers of Economics and Globalization

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Working Paper: Public inputs, urban development, and welfare in a developing economy (2008)
Working Paper: Public inputs, urban development, and welfare in a developing economy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00645330

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