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Public Capital and Private Productivity

Wim P. M. Vijverberg; Chu‐Ping C. Vijverberg; Janet L. Gamble

University of Texas at Dallas

The Review of Economics and Statistics 1997

This paper uses three different approaches to investigate whether the declining provision of public capital is a major cause of declining labor productivity. The juxtaposition of approaches removes the variability in estimates due to dissimilar variable definitions and econometric methodologies. Estimates are based on U.S. time-series data and are evaluated by the implied elasticities of substitution, the prediction of labor productivity trends, and the impact of public capital on productivity. As the three approaches yield very different estimates, it will be hard to ever settle the debate about the effect of public capital on private productivity.

DOI
10.1162/003465397556629
Volume
79 (2)
Pages
267-278
Language
en
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