Economic Impacts of Public Capital on Economic Growth and Land Use: an extension to a two-region dynamic model

IR

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Other Title
  • 社会資本が経済成長と土地利用に及ぼす影響　―二地域動学モデルへの拡張―

Abstract

We extended the Nara[2019] model , in which lands are used for various purposes including vacant land for speculation and public capital financed by income tax, leading to sustained economic growth via its technological externalities,to a two-region dynamic model.Then we analysed the patterns of spatial distribution of both households and public capital over two regions, identifying two possible equilibrium states of spatial distribution, i.e., a symmetric equilibrium in which they are evenly distributed and an asymmetric one in which they are distributed unevenly. Furthermore, we analysed the impact of raising the tax rate on the rate of economic growth and the ratio of land put to productive use in the symmetric equilibrium. We found that the economic growth rate peaks at a specific tax rate, while the proportion of land used productively reaches its minimum at this same rate.

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