Common-property, public infrastructure and rent dissipation in the long-run
Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)
By means of an overlapping generations model we study some long-run steady state features prompted by free-access public capital which enters a constant-returns-to-scale production function, dissipating its return among the private factors. The public investment is funded by lump-sum taxes in both younger and older generations. Our main conclusion is that the utility of an individual living in the long run steady state equilibrium may decline, even when the private capital-labor ratio increases, as a con-sequence of both an increase in per-capita public investment, and a shift of the tax burden from the younger to the older generation.
Keywords: Public capital; rent dissipation; long-run steady state (search for similar items in EconPapers)
JEL-codes: E69 H49 (search for similar items in EconPapers)
Pages: 21 pages
New Economics Papers: this item is included in nep-mac
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http://www.ivie.es/downloads/docs/wpasad/wpasad-2015-10.pdf Fisrt version / Primera version, 2015 (application/pdf)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2015-10
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