Public Intermediate Goods Research Articles

Individual incentives in the supply of public inputs

The free-rider hypothesis states that, in the decision on public-goods and private-good provision, individual incentives are such that public goods will tend to be undersupplied. This paper examines the free-rider argument as it applies to public intermediate goods. It is shown that, unlike in a static model, in a dynamic world there may exist incentives for firms to act cooperatively in determining the supply of public intermediate goods. In a dynamic context there is a cost to free riding: what one firm does now affects what others will do in the future. Provided future profits are not discounted too heavily, the free-rider problem may disappear when a time dimension is added to the theory.

Public Intermediate Goods, Production Possibilities, and International Trade

Public Intermediate Goods, Production Possibilities, and International Trade

A Dynamic Analysis of Public Intermediate Goods Supply in Open Economy

A Dynamic Analysis of Public Intermediate Goods Supply in Open Economy

Public intermediate goods and distortionary taxation

In the Pigovian tradition, when public intermediate goods are financed by distortionary taxation, expenditure should not be carried so far as to equate the sum of the marginal productivities with the marginal cost. This paper shows how this rule may break down when commodity taxes are used to finance public intermediate goods.

The pricing of public intermediate goods

The pricing of public intermediate goods