2024-03-29T08:33:47Z
https://nagoya.repo.nii.ac.jp/oai
oai:nagoya.repo.nii.ac.jp:00028479
2023-01-16T04:03:14Z
1076:1077:1078
A Two-country Model of Public Infrastructure Capital : Trade Patterns and Trade Gains in the Long Run
Yanase, Akihiko
93264
Tawada, Makoto
93265
Public infrastructure capital
Two-country trade
Trade pattern
Gains/losses from trade
Terms-of-trade effect
2019-08
This study develops a two-country dynamic trade model with public infrastructure capital that has a positive effect on private sector productivity. Under the assumptions that welfare-maximizing national governments determine the paths of production taxes for financing public investment and that infrastructure has an "unpaid factor" property, this study examines the economy's trade pattern and the long-run effects of trade. If governments take world prices as given when they make public investments, a country with a smaller labor endowment, a lower depreciation rate for infrastructure capital stock, and/or a lower rate of time preference will become an exporter of a good that is more dependent on public infrastructure and will unambiguously gain from trade, whereas its trading partner may lose from trade. In the case of strategic governments that recognize the effect on the terms of trade when they determine their policy paths, the country exporting (importing) the good that is more dependent on the stock of public infrastructure will underaccumulate (overaccumulate) infrastructure in the long run.
This work has been financially supported by Japan Society for the Promotion of Science (JSPS) Grant-in-Aid for Scientific Research (B) (No. 16H03612), (C) (No.17K03730), and Fund for the Promotion of Joint International Research (No. 16KK0079).
departmental bulletin paper
名古屋大学大学院経済学研究科附属国際経済政策研究センター
2019-08
Economic Research Center Discussion Paper
E19-8
1
36
eng
E-Series;E19-8