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A calibration of the output elasticity of public capital

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  • Carmen D. Ã lvarez-Albelo

    (Universidad de La Laguna)

Abstract

The empirical literature is far from having reached a consensus on the output elasticity of public capital. This lack of consensus continues to hinder quantitative general equilibrium analysis and fiscal policy study. Therefore, this paper aims to clarify the order of magnitude of this elasticity by performing a calibration for 14 European Union (EU) countries in the period 1980-2014. To do this, a growth model is developed based on the theoretical and empirical literature on public capital. The calibrated elasticity ranges between 0.05 and 0.13. These results are in line with the panel estimates for 6 EU countries in the period 1969-2002 by Creel and Poilon (2008).

Suggested Citation

  • Carmen D. Ã lvarez-Albelo, 2018. "A calibration of the output elasticity of public capital," Economics Bulletin, AccessEcon, vol. 38(2), pages 761-771.
    • Handle: RePEc:ebl:ecbull:eb-17-00965
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    More about this item

    Keywords

    Public capital; output elasticity; calibration;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • A1 - General Economics and Teaching - - General Economics

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