Matches in SemOpenAlex for { <https://semopenalex.org/work/W609563441> ?p ?o ?g. }
- W609563441 abstract "The relationship between investment in public infrastructure and growth has become a pervasive theme in the theoretical and empirical literatures on economic growth in both developed and developing countries alike. Much of the recent debate on the means to reduce persistent poverty in developing countries and to spur growth in all countries has revolved around the idea of significantly boosting investment in public infrastructure. The rationale behind that idea is the belief that infrastructure services have a strong impact on growth via their positive effects on the productivity of private firms. This paper assesses the growth, sectoral and welfare implications of increased spending on infrastructure using a multisector intertemporal general equilibrium with public capital and heterogeneous agents. The seminal works of Aschauer (1989) and Barro (1990) have paved the way to a substantial volume of studies that aim to provide a better grasp of the contribution of public infrastructure to economic growth. The theoretical literature has mostly focused on modeling public infrastructure as an input in firm technology so as to account for its externality in production. Several studies in the empirical literature on infrastructure and growth have employed a variety of econometric techniques to find support for a positive impact of public infrastructure on growth. Aschauer (1989), Calderon and Serven (2004), and Sahoo and Dash (2009) are few examples among several others. Some of these studies have been heavily criticized for obtaining overly high output elasticities of public investment because of methodological weaknesses[1]. Yet, a good understanding of the multiple linkages through which investment in public infrastructure exerts an impact on economic growth is required. In that respect, econometric regressions do not provide an adequate framework for tracing the transmission mechanisms that we need to understand. In particular, they do not allow for an analysis of important general equilibrium feedback effects of spending on public infrastructures as well as their fiscal implications. These general equilibrium effects of public investment are the more important since their increase needs to be financed somehow by either increasing taxes or foreign aid. The increase in taxation may discourage private investment, and thereby affect economic growth negatively. The overall effects of increasing public investment in infrastructure depend thus on the trade-off between the positive productivity effect of public investment and the distortionary effects of taxes. Most of the existing CGE studies are of a recursive-dynamic nature in the sense that they are simply stacked static models linked by a simple adjustment of the stocks of primary factors from one period to another. Identical to the approach of static models, saving and investment decisions are determined in an ad hoc manner where households and firms are assumed to behave myopically. Yet, saving and investment decisions, which are crucial to the growth process, are purely intertemporal decisions that take into consideration expectations on variables in the future. Intertemporal CGE models, in which firms and households are no longer myopic, are better suited to adequately capture the adjustment, the transmission mechanisms, and the growth and distributive implications of the proposed policy change. In this paper we develop a multisector, intertemporal general equilibrium model with public capital and heterogeneous agents to assess the growth and sectoral implications of increased government spending on infrastructure in a developing country. We use a stock approach to model public capital in firm's technology. The introduction of heterogeneity among agents stems from the desire to take into account a peculiar characteristic of developing countries where a significant proportion of households and firms do not or cannot display forward-looking behavior as they lack access to the credit market. The model considers two categories of households and two categories of firms. It distinguishes on the one hand, between forward-looking and myopic households, and on the other hand, between forward-looking and myopic firms. Previous papers such as Campbell and Mankiw (1989), Carmichael and Samson (1995), McKibbin and Vines (2000) and Berg et al. (2010) have also introduced heterogeneity among households in intertemporal models. Nevertheless, in contrast to those models, which assume that myopic households consume all their one-source income (wages), we assume that myopic households have an additional source of income to their wages, (capital income) as they are the owners of the myopic firms. They do not consume all of their disposable income; they only consume a constant fraction of it (less than one, as in a Solow growth model). It follows that in our model, myopic households do save; their savings are used to fund investment in physical capital made available to myopic firms. In contrast, the savings of forward-looking households are used to fund investment in forward looking firms that they own. Thus, the model establishes an isomorphism between the set of household categories and the set of firm categories as far as the return to capital is concerned. In contrast to forward-looking firms in which managers maximize the discounted sum of dividends, managers of myopic firms maximize their current profits. We elect to use the model to study the growth implications of increased public capital in an African country, Benin, which is a small-open economy of West-Africa where international organizations have started to place a strategic emphasis on public infrastructure as an important means for achieving stronger economic growth and poverty reduction. A recent World Bank assessment of this country (World Bank, 2009) clearly emphasizes the need to raise the level of public infrastructure that is partly responsible for the low levels of private investment and entrepreneurship. See above See above" @default.
- W609563441 created "2016-06-24" @default.
- W609563441 creator A5074838104 @default.
- W609563441 creator A5075088982 @default.
- W609563441 date "2011-07-06" @default.
- W609563441 modified "2023-09-27" @default.
- W609563441 title "Public Infrastructure and Economic Growth A Dynamic General Equilibrium Analysis with Heterogeneous Agents" @default.
- W609563441 cites W1507455522 @default.
- W609563441 cites W1553647189 @default.
- W609563441 cites W1971711158 @default.
- W609563441 cites W1975648197 @default.
- W609563441 cites W1978637092 @default.
- W609563441 cites W1984103808 @default.
- W609563441 cites W2011848437 @default.
- W609563441 cites W2015208836 @default.
- W609563441 cites W2020748293 @default.
- W609563441 cites W2025469642 @default.
- W609563441 cites W2033291853 @default.
- W609563441 cites W2049960902 @default.
- W609563441 cites W2053149162 @default.
- W609563441 cites W2082988820 @default.
- W609563441 cites W2085089697 @default.
- W609563441 cites W2097656922 @default.
- W609563441 cites W2145923999 @default.
- W609563441 cites W2147081279 @default.
- W609563441 cites W2954439889 @default.
- W609563441 cites W3121259379 @default.
- W609563441 cites W3122611856 @default.
- W609563441 cites W3124310736 @default.
- W609563441 cites W3125607045 @default.
- W609563441 cites W3148602744 @default.
- W609563441 hasPublicationYear "2011" @default.
- W609563441 type Work @default.
- W609563441 sameAs 609563441 @default.
- W609563441 citedByCount "6" @default.
- W609563441 countsByYear W6095634412012 @default.
- W609563441 countsByYear W6095634412013 @default.
- W609563441 countsByYear W6095634412014 @default.
- W609563441 countsByYear W6095634412015 @default.
- W609563441 countsByYear W6095634412020 @default.
- W609563441 crossrefType "posted-content" @default.
- W609563441 hasAuthorship W609563441A5074838104 @default.
- W609563441 hasAuthorship W609563441A5075088982 @default.
- W609563441 hasConcept C100001284 @default.
- W609563441 hasConcept C103382277 @default.
- W609563441 hasConcept C139719470 @default.
- W609563441 hasConcept C16118543 @default.
- W609563441 hasConcept C162222271 @default.
- W609563441 hasConcept C162324750 @default.
- W609563441 hasConcept C175444787 @default.
- W609563441 hasConcept C17744445 @default.
- W609563441 hasConcept C190430219 @default.
- W609563441 hasConcept C199539241 @default.
- W609563441 hasConcept C204983608 @default.
- W609563441 hasConcept C27548731 @default.
- W609563441 hasConcept C2776330005 @default.
- W609563441 hasConcept C2776675903 @default.
- W609563441 hasConcept C2776943663 @default.
- W609563441 hasConcept C2778348673 @default.
- W609563441 hasConcept C2994464924 @default.
- W609563441 hasConcept C50522688 @default.
- W609563441 hasConcept C83864248 @default.
- W609563441 hasConcept C94625758 @default.
- W609563441 hasConceptScore W609563441C100001284 @default.
- W609563441 hasConceptScore W609563441C103382277 @default.
- W609563441 hasConceptScore W609563441C139719470 @default.
- W609563441 hasConceptScore W609563441C16118543 @default.
- W609563441 hasConceptScore W609563441C162222271 @default.
- W609563441 hasConceptScore W609563441C162324750 @default.
- W609563441 hasConceptScore W609563441C175444787 @default.
- W609563441 hasConceptScore W609563441C17744445 @default.
- W609563441 hasConceptScore W609563441C190430219 @default.
- W609563441 hasConceptScore W609563441C199539241 @default.
- W609563441 hasConceptScore W609563441C204983608 @default.
- W609563441 hasConceptScore W609563441C27548731 @default.
- W609563441 hasConceptScore W609563441C2776330005 @default.
- W609563441 hasConceptScore W609563441C2776675903 @default.
- W609563441 hasConceptScore W609563441C2776943663 @default.
- W609563441 hasConceptScore W609563441C2778348673 @default.
- W609563441 hasConceptScore W609563441C2994464924 @default.
- W609563441 hasConceptScore W609563441C50522688 @default.
- W609563441 hasConceptScore W609563441C83864248 @default.
- W609563441 hasConceptScore W609563441C94625758 @default.
- W609563441 hasLocation W6095634411 @default.
- W609563441 hasOpenAccess W609563441 @default.
- W609563441 hasPrimaryLocation W6095634411 @default.
- W609563441 hasRelatedWork W1504276951 @default.
- W609563441 hasRelatedWork W1532203918 @default.
- W609563441 hasRelatedWork W1673989082 @default.
- W609563441 hasRelatedWork W1983722198 @default.
- W609563441 hasRelatedWork W2007540180 @default.
- W609563441 hasRelatedWork W2112877478 @default.
- W609563441 hasRelatedWork W2140927714 @default.
- W609563441 hasRelatedWork W2147081279 @default.
- W609563441 hasRelatedWork W231657778 @default.
- W609563441 hasRelatedWork W2324015830 @default.
- W609563441 hasRelatedWork W2516871357 @default.
- W609563441 hasRelatedWork W2950953139 @default.
- W609563441 hasRelatedWork W2993072434 @default.
- W609563441 hasRelatedWork W3008524858 @default.