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• W3124904240 abstract "We develop a model in which public capital is both an engine of growth and a determinant of the distributions of wealth, income, and welfare. Government investment increases wealth inequality over time, regardless of its financing. The time path of income inequality is, however, highly sensitive to financing policies, and is often characterized by sharp intertemporal tradeoffs, with income inequality declining in the short run but increasing in the long run. Public investment generates a positive correlation between growth and income inequality along the transition path, but their short-run and long-run relationship depends critically on (i) how externalities impinge on allocation decisions, (ii) financing policies, and (iii) the time period of consideration. Finally, these policies also generate sharp trade-offs between average welfare and its distribution, with government investment improving average welfare, but also increasing its dispersion. Our results are obtained numerically but extensive sensitivity analysis confirms their robustness across key parameter values." @default.
• W3124904240 created "2021-02-01" @default.
• W3124904240 creator A5021634467 @default.
• W3124904240 creator A5057293659 @default.
• W3124904240 date "2012-11-01" @default.
• W3124904240 modified "2023-09-27" @default.
• W3124904240 title "Infrastructure and inequality" @default.
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• W3124904240 doi "https://doi.org/10.1016/j.euroecorev.2012.08.003" @default.
• W3124904240 hasPublicationYear "2012" @default.
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