Competitive equilibrium and public investment plans

Gerhard Glomm, B. Ravikumar

Research output: Contribution to journalArticle

10 Scopus citations

Abstract

We examine a one-sector growth model in which public capital is an external input to private production functions. Revenues from taxing capital and labor income are used to fund public investments. The competitive equilibrium can be obtained by solving an artificial planning problem. We prove that there exists a unique competitive equilibrium which can be characterized by Euler equations and a transversality condition. We then establish the existence of an optimal public investment plan.

Original languageEnglish (US)
Pages (from-to)1207-1224
Number of pages18
JournalJournal of Economic Dynamics and Control
Volume23
Issue number8
StatePublished - Aug 1 1999

Keywords

  • Competitive equilibrium
  • E1
  • E6
  • Growth
  • H4.
  • Infrastructure
  • Optimal plan
  • Public investment

ASJC Scopus subject areas

  • Economics and Econometrics
  • Control and Optimization
  • Applied Mathematics

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