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Common-property, public infrastructure and rent dissipation in the long-run

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  • Ramón José Torregrosa Montaner

    (Universidad de Salamanca)

Abstract

By means of an overlapping generations model we study some long-run steady state features prompted by free-access public capital which enters a constant-returns-to-scale production function, dissipating its return among the private factors. The public investment is funded by lump-sum taxes in both younger and older generations. Our main conclusion is that the utility of an individual living in the long run steady state equilibrium may decline, even when the private capital-labor ratio increases, as a con-sequence of both an increase in per-capita public investment, and a shift of the tax burden from the younger to the older generation.

Suggested Citation

  • Ramón José Torregrosa Montaner, 2015. "Common-property, public infrastructure and rent dissipation in the long-run," Working Papers. Serie AD 2015-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2015-10
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Public capital; rent dissipation; long-run steady state;
    All these keywords.

    JEL classification:

    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
    • H49 - Public Economics - - Publicly Provided Goods - - - Other

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