RT Report
T1 Coordinating short-and long-run public investment rules
A1 Marrero, Gustavo A.
AB Se analiza, dado un objetivo a largo plazo del ratio inversión pública/PIB, este ratio, además va a reaccionar a lo largo de la transición según el estado de la economía. Esta regla de inversión pública es mas flexible que la que es comunmente considerada en la literatura, donde la ratio inversión publica/PIB es constante. En comparación con esta simple regla, y bajo regímenes impositivos alternativos, se obtienen importantes ganancias de bienestar al coordinar de manera  óptima la política de corto y largo plazo.Modelling the accumulation rule evolving public investment is an issue of utmost interestamong economists and politicians. The present paper extends the Barro (1990)model of productive government expenditure by considering a time-adapted rule for thepublic investment/output ratio. The rule allows a particular target on the public investmentratio to be achievable in the long-run. Additionally, throughout the transition, thegovernment may adjust its period-by-period public investment/output ratio in responseto the current productivity of public capital relative to its long-run level. The degree ofthis response depends on a short-run policy instrument, which is decided by the fiscalauthority simultaneously to the long-run target ratio. That way, the government problemcould be interpreted as a coordination problem between short- and long-term policies. Incomparison with a constant-ratio rule, and under alternative taxing scenarios, importantwelfare improvements are found when coordinating the short- and the long-run policyinstruments in an optimal way.
PB Instituto Complutense de Análisis Económico. Universidad Complutense de Madrid
YR 2001
FD 2001
LK https://hdl.handle.net/20.500.14352/64468
UL https://hdl.handle.net/20.500.14352/64468
LA eng
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NO JEL Classification: E0, E6, O4.
DS Docta Complutense
RD 7 may 2024