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Cover von: Fiscal Policy and Adjustment Costs of Private Investment in an Endogenous Growth Model with Public Capital
Toshiki Tamai

Fiscal Policy and Adjustment Costs of Private Investment in an Endogenous Growth Model with Public Capital

Rubrik: Articles
Jahrgang 62 (2006) / Heft 4, S. 455-470 (16)
Publiziert 09.07.2018
DOI 10.1628/001522106X172652
Veröffentlicht auf Englisch.
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Beschreibung
This paper develops an endogenous growth model with public capital and examines the growth and welfare effects of a fiscal policy that is financed by corporate taxation. In the model, we incorporate the investment decision-making of competitive firms by considering the adjustment costs of private investment. We show that there arises an indeterminacy of the balanced growth path. Furthermore, it is demonstrated that growth-maximizing policy is not equivalent to welfare-maximizing policy on the balanced growth path.