A BEJM Topics article.

Abstract

This paper studies the growth effects of productive public expenditures on education and public capital in an endogenous growth model of overlapping generations. The model is calibrated to Latin American data, and the effects of raising government expenditures on education and public capital are computed. Results show that increases in these public expenditures have moderate, positive effects on per capita growth and income under different scenarios. In addition, re-allocating expenditures from public capital to education while keeping the budget constant can raise growth up to a threshold.

Submitted: September 4, 2002 · Accepted: June 6, 2003 · Published: April 11, 2005

Originally published in Topics in Macroeconomics.

Recommended Citation

Rioja, Felix K. (2005) "Roads versus Schooling: Growth Effects of Government Choices," Topics in Macroeconomics: Vol. 5 : Iss. 1, Article 7.
Available at: http://www.bepress.com/bejm/topics/vol5/iss1/art7