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Privately provided public goods in a dynamic economy.

Marsiliani, Laura and Renstroem, Thomas (2010) 'Privately provided public goods in a dynamic economy.', Working Paper. Durham University, Durham.

Abstract

We show that when individuals can save (accumulate capital), they all eventually becomepublic-good contributors. In steady state, larger economies have more contributors. If thepublic good is normal, then its quantity increases in population size in the open-loopequilibrium, but not necessarily in the feedback equilibrium. If both private and public goodsare normal, then the open-loop equilibrium exhibits greater steady-state public provision thanthe feedback equilibrium. If private consumption is inferior the opposite is true. Interpretingindividuals as countries, our findings suggest that all countries over time will becomecontributors toward a global public good.

Item Type:Monograph (Working Paper)
Keywords:Private provision, Public goods, Dynamic, Intertemporal, differential game, JEL classifcation: C73 D91 E21 H40.
Full text:PDF - Published Version (312Kb)
Status:Not peer-reviewed
Publisher Web site:http://www.dur.ac.uk/business/faculty/working-papers/
Record Created:07 Dec 2012 10:37
Last Modified:16 Oct 2013 13:30

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