Template-type: ReDIF-Paper 1.0
Author-Name: Getachew, Yoseph
Author-Email: getachew@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Title: Public Capital, Income Distribution and Growth
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.
Classification-JEL: D31, H54, O41
Keywords: Income Distribution, Public Capital, Economic Growth
Series: UNU-MERIT Working Papers
Creation-Date: 2008
Number: 056
File-URL: http://www.merit.unu.edu/publications/wppdf/2008/wp2008-056.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2008056