Growth and public infrastructure

Hashimzade, N. and Myles, G. D. (2010) Growth and public infrastructure. Macroeconomics Dynamics, 14 (Supple). pp. 258-274. ISSN 1469-8056 doi: 10.1017/S1365100510000374

Abstract/Summary

The paper analyzes a multicountry extension of the Barro model of productive public expenditure. In the presence of positive infrastructural externalities between countries, the provision of infrastructure will be inefficiently low if countries do not coordinate. This provides a role for a supranational body, such as the European Union, to coordinate the policies of the individual governments. It is shown how intervention by a supranational body can raise welfare by internalizing the infrastructural externality. Infrastructural externalities increase the importance of tax policy in the growth process and distribute the benefits of taxation across countries.

Additional Information	Supplement S2 (Public Policy, Externalities, and Economic Growth)
Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/16926
Identification Number/DOI	10.1017/S1365100510000374
Refereed	Yes
Divisions	Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Economics
Uncontrolled Keywords	Public Infrastructure, Growth, Externalities
Additional Information	Supplement S2 (Public Policy, Externalities, and Economic Growth)
Publisher	Cambridge University Press
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