| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5060680 | Economics Letters | 2012 | 4 Pages |
Abstract
This paper examines the effects of a budget-neutral public spending allocation between public investment and private investment subsidy on inequality dynamics and intergenerational mobility in an environment with heterogeneous households and incomplete capital market.
⺠We study the effects of productive public choices on inequality persistence. ⺠The government subsidizes private investment and also invests in public capital. ⺠The distributional effect is determined by the factors' elasticity of substitution. ⺠If it is greater than unity, an increase in public investment mitigates inequality. ⺠If it is less than unity, investment subsidy rather leads to a more equal society.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Yoseph Yilma Getachew,