Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/117884
Authors: 
Piras, Romano
Year of Publication: 
2004
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 5.2004
Abstract: 
This paper presents a general equilibrium endogenous growth model in which public spending is divided between public productive services and public consumption. A distinguishing feature of the model is the assumption that both components of public spending can be over used and, thus, congested by the private agents. We study the second-best dynamics of the model and prove that it is determinate. Moreover, we show that the optimal second-best policy could be not unique. Finally, the relationship between congestion and the optimal second-best policy, on the one hand, and congestion and the long run growth rate, on the other, is established.
Subjects: 
Endogenous growth
Congestion
Public spending
Second-Best
JEL: 
H3
H5
O4
Document Type: 
Working Paper

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