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Financial Effects of Privatizing the Production of Investment Goods

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  • Stefano Bosi

    (EPEE, Université d’Evry - Val d’Essonne)

  • Carine Nourry

    (EPEE, Université d’Evry - Val d’Essonne)

Abstract

This paper focuses on a two-sector overlapping generations model with productive capital, where the investment good is jointly provided by government and private …rms. Keeping, for simplicity, the production technologies identical for both sectors, we look at the issue of existence and stability of steady states and we derive some necessary and su¢cient conditions to observe a unique rational expectations equilibrium. In particular we study the real and …nancial e¤ects of privatization. In our very speci…c context, we highlight, by means of numerical simulations, a negative privatization impact on the utility level and the speed of absorbing exogenous shocks

Suggested Citation

  • Stefano Bosi & Carine Nourry, 2001. "Financial Effects of Privatizing the Production of Investment Goods," Documents de recherche 01-10, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:01-10
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    References listed on IDEAS

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    2. Jess Benhabib & Kazuo Nishimura, 2012. "Indeterminacy and Sunspots with Constant Returns," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 311-346, Springer.
    3. H. Uzawa, 1971. "On a Two-Sector Model of Economic Growth," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 3, pages 19-26, Palgrave Macmillan.
    4. SchmitzJr, James A., 2001. "Government production of investment goods and aggregate labor productivity," Journal of Monetary Economics, Elsevier, vol. 47(1), pages 163-187, February.
    5. Hirofumi Uzawa, 1964. "Optimal Growth in a Two-Sector Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 31(1), pages 1-24.
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