Solow-Swan growth model with global capital markets and congestible public goods
MPRA Paper from University Library of Munich, Germany
The traditional Solow-Swan growth framework has only one kind privately owned capital. Output saved in a period is transformed into privately owned capital through the saving channel. We add a fiscal channel that taxes output and transforms it into public goods subject to congestion. We show that under the standard conditions the steady state of the economy is determined by the interaction of these two channels and prosperity for a country is only attained if both channels work properly.
Keywords: Economic Growth; Public Goods; Infrastructure; Congestion (search for similar items in EconPapers)
JEL-codes: H1 H41 O11 O16 O41 O43 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:87844
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