Governmental activity and private capital investment

Arbeitspapier

We analyze within a dynamic model how firms decide on capital investment if the accompanying adjustment costs are a function of governmental activity. The government provides a public input and decides on the degree of rivalry. The productive public input enhances private capital productivity and reduces adjustment costs. We derive the equilibrium in which capital and investment ratio are both constant, carry out comparative dynamic analysis and discuss the model's policy implications.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper Series in Economics ; No. 26

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Publicly Provided Goods: General ; National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Subject: Investition ; Infrastrukturinvestition ; Bottleneck ; Anpassungskosten ; Dynamisches Gleichgewicht ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ott, Ingrid ; Soretz, Susanne
• Event: Veröffentlichung
• (who): Universität Lüneburg, Institut für Volkswirtschaftslehre
• (where): Lüneburg
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/28120
• Last update: 10.03.2025, 11:43 AM CET