Global behaviour of a system with imperfect private-public substitutability

• 成果类型: Article
• 署名作者: Zhang, J
• 署名单位: University of Dundee
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(97)00030-3
• 发表日期: 1998
• 页码: 437-454
• 关键词: substitutability versus complementarity; non-constant returns to scale; global dynamics; self-fulfilling expectations

摘要

Empirical findings reveal that the relationship between private and public consumption generically differs from country to country: it is substitutable for some, while it is complementary for others. The present paper incorporates this regularity into a simple growth model with public goods which affect utility and production. The model casts off the standard assumption of socially constant returns to scale, and as a result it generates many interesting dynamic features, which do not arise with constant returns. When the system displays increasing returns, the dynamic path may diverge from an interior equilibrium in expanding oscillations, suggesting that self-fulfilling expectations could play an essential role. With decreasing returns, the interior equilibrium becomes a saddle point. Interestingly, it turns out that the substitutability versus complementarity distinction does make a difference in affecting the stationary state and its transitional dynamics. (C) 1998 Elsevier Science S.A.