Public Capital, Income Distribution and Growth
Getachew, Yoseph Yilma (2008). Public Capital, Income Distribution and Growth. UNU-MERIT.
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Author Getachew, Yoseph Yilma Title Public Capital, Income Distribution and Growth Publication Date 2008 Publisher UNU-MERIT Abstract Public capital investment plays an important role in long run growth through enhancing productivity and complementing the accumulation of private inputs. Under appropriate conditions, public capital could also have important implications for income distribution dynamics. When the credit market is imperfect and there are diminishing returns to private factors, income inequality is negatively related to economic growth. The dynamics of income distribution is determined by relative income shares of private input, wherever initial endowment differs among individuals. Therefore, if the provision of public capital has an effect on relative income shares of private inputs, then it will have an effect on income distribution dynamics. In this case, public capital once more becomes an important determinant of long-run growth through its indirect effect on income distribution. The paper studies this and other interesting issues with respect to public capital, income inequality and economic growth. Keyword Income distribution
Public capital
Economic growthJEL D31
H54
O41Copyright Holder UNU-MERIT Copyright Year 2008 ISSN 1871-9872 -
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