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The optimal provision of public inputs in a second best scenario

Author

Listed:
  • Diego Martinez-Lopez

    (centrA and University Pablo de Olavide)

Abstract
This paper provides a simple general equilibrium model with productive public spending and distorting taxes. The optimal conditions for the provision of public inputs are obtained under different tax systems. Also we discuss which factors affect the marginal cost of public funds.

Suggested Citation

  • Diego Martinez-Lopez, 2004. "The optimal provision of public inputs in a second best scenario," Economics Bulletin, AccessEcon, vol. 8(3), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-04h40001
    as

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    References listed on IDEAS

    as
    1. James P. Feehan & Mutsumi Matsumoto, 2000. "Productivity‐enhancing public investment and benefit taxation: the case of factor‐augmenting public inputs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(1), pages 114-121, February.
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    11. Thomas Aronsson & Tomas Sjögren, 2002. "Income Taxation, Commodity Taxation and Provision of Public Goods under Labor Market Distortions," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(3), pages 347-370, August.
    12. Timothy Gronberg & Liqun Liu, 2001. "The Second‐Best Level of a Public Good: An Approach Based on the Marginal Excess Burden," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 3(4), pages 431-453, October.
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    15. Lars Hokonsen, 1998. "An Investigation into Alternative Representations of the Marginal Cost of Public Funds," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 329-343, July.
    16. Charles L. Ballard & Don Fullerton, 1992. "Distortionary Taxes and the Provision of Public Goods," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 117-131, Summer.
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    18. Ming Chang, 2000. "Rules and Levels in the Provision of Public Goods: The Role of Complementarities between the public Good and Taxed Commodities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(1), pages 83-91, February.
    19. James P. Feehan, 2002. "Distortionary Taxation and Optimal Public Spending on Productive Activities," Economic Inquiry, Western Economic Association International, vol. 40(1), pages 60-68, January.
    20. Wilson, John Douglas, 1991. "Optimal Public Good Provision with Limited Lump-Sum Taxation," American Economic Review, American Economic Association, vol. 81(1), pages 153-166, March.
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    More about this item

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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