Abstract
The purpose of this paper is to empirically assess the optimality of the level of public capital in Japan. We use a methodological approach based on Burgess’s (1988) procedure for calculating the public discount rate. This approach involves estimating a production function, but does not necessarily require utility function estimation. The results indicate that, although the Japanese economy experienced a public capital deficiency over the period 1960-1982, public capital moved toward optimal levels throughout the period.
Article Footnote
We wish to acknowledge helpful discussions with Nobuhiro Okuno and Akira Yakita. We are also grateful to Michiro Kaiyama and anonymous referees for their valuable comments on an earlier version of this paper, and Dennis Ray for kindly editing the English of our manuscript.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Aschauer DA (1989) Is public expenditure productive? Journal of Monetary Economics 23:177200
Baltagi BH, Pinnoi N (1995) Public capital stock and state productivity growth: Further evidence from an error components model. Empirical Economics 20:351–359
Berndt ER, Hansson B (1991) Measuring the contribution of public infrastructure capital in Sweden. NBER Working Paper No. 3842
Burgess DF (1988) Complementarity and the discount rate for public investment. Quarterly Journal of Economics 102:527–541
Dalamagas B (1995) A Reconsideration of the public sector’s contribution to growth. Empirical Economics 20:385–414
Databank Bureau of Nihon Keizai Shimbun (1988) Economic analysis of the anti-wealth effect by Nikkei macro-econometric model. A paper presented at the 19th Macro Econometric Model Conference, Osaka, in Japanese
Econometric Committee of Economic Council (1984) Multisectoral econometric model for mid-and long-run analysis. Printing Bureau of Ministry of Finance, in Japanese
Evans P, Karras G (1994) Are government activities productive? Evidence from a panel of U. S. states. Review of Economics and Statistics 76:1–11
Holtz-Eakin D (1994) Public-sector capital and the productivity puzzle. Review of Economics and Statistics 76:12–21
Ito T (1992) The Japanese economy. The MIT Press
Lau LJ (1978) Applications of profit functions. In: Fuss M, McFadden D (eds.) Production economics: A dual approach to theory and applications, Volume 1, North-Holland, Amsterdam, pp. 133–216
Lynde C, Richmond J (1993) Public capital and total factor productivity. International Economic Review 34:401–414
Lynde C, Richmond J (1992) The role of public capital in Production. Review of Economics and Statistics 74:37–44
Nadiri MI, Mamuneas TP (1994) The effects of public infrastructure and R&D capital on the cost structure and performance of U.S. manufacturing industries. Review of Economics and Statistics 76:22–37
Ogura S, Yohe G (1977) The complementarity of public and private capital and the optimal rate of return to government investment. Quarterly Journal of Economics 91:651–662
Ornelas FS, Shumway CR, Ozuna T (1994) Using the quadratic Box-Cox flexible functional form selection and unconditional variance computation. Empirical Economics 19:639–645
Planning Bureau of Economic Planning Agency (1986) Social capital stock in Japan. Gyousei,Tokyo, in Japanese
Sandmo A, Drèze JH (1971) Discount rate for public investment in closed and open economies. Economica 38:395–412
Shah A (1992) Dynamics of public infrastructure, industrial productivity and profitability. Review of Economics and Statistics 74:28–36
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2000 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Nemoto, J., Kamada, K., Kawamura, M. (2000). Estimates of optimal public capital stocks in Japan using a public investment discount rate framework. In: Boadway, R., Raj, B. (eds) Advances in Public Economics. Studies in Empirical Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-57654-6_8
Download citation
DOI: https://doi.org/10.1007/978-3-642-57654-6_8
Publisher Name: Physica, Heidelberg
Print ISBN: 978-3-642-63324-9
Online ISBN: 978-3-642-57654-6
eBook Packages: Springer Book Archive