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Carmen D. Álvarez-Albelo
''A calibration of the output elasticity of public capital''
( 2018, Vol. 38 No.2 )
The empirical literature is far from having reached a consensus on the output elasticity of public capital. This lack of consensus continues to hinder quantitative general equilibrium analysis and fiscal policy study. Therefore, this paper aims to clarify the order of magnitude of this elasticity by performing a calibration for 14 European Union (EU) countries in the period 1980-2014. To do this, a growth model is developed based on the theoretical and empirical literature on public capital. The calibrated elasticity ranges between 0.05 and 0.13. These results are in line with the panel estimates for 6 EU countries in the period 1969-2002 by Creel and Poilon (2008).
Keywords: Public capital, output elasticity, calibration
JEL: H5 - National Government Expenditures and Related Policies National Government Expenditures and Related Policies: General
A1 - General Economics: General
Manuscript Received : Dec 07 2017 Manuscript Accepted : Apr 15 2018

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