search query: @author Sakoulis, G. / total: 1
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| Author: | Chatterjee, S. Sakoulis, G. Turnovsky, S.J. |
| Title: | Unilateral capital transfers, public investment, and economic growth |
| Journal: | European Economic Review
2003 : DEC, VOL. 47:6, p. 1077-1103 |
| Index terms: | Models Public sector Investments Economic growth |
| Freeterms: | Capital transfer |
| Language: | eng |
| Abstract: | In this paper, the effects of a transfer tied to investment in public infrastructure from a traditional pure transfer are contrasted. The latter has no growth or dynamic consequences, it is always welfare improving, the gains increasing with the stock of government debt and the benefits of debt reduction. A tied transfer generates dynamic adjustments, as public capital is accumulated in the recipient economy. Its long-run growth and welfare effects depend on the initial stock of infrastructure, as well as co-financing arrangements. These contrasts also apply to temporary transfers, particularly the transitional dynamics. A temporary pure transfer has only modest short-run growth effects and leads to a permanent deterioration of the current account, while a productive transfer has significant impacts on short-run growth, leading to permanent improvements in key economic variables including the current account. |
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