Public sector pricing, capital mobility and national income: A two-sector general-equilibrium analysis

Chi-Chur Chao; Eden S. H. Yu

doi:10.1111/1468-0106.00177

Public sector pricing, capital mobility and national income: A two-sector general-equilibrium analysis

Chi-Chur Chao
, Eden S. H. Yu

City University of Hong Kong

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

Abstract

This paper examines the resource allocation and income effects of public-sector pricing. During the short run, raising public-sector prices leads to a worsening in public-sector efficiency, causing a decline in GNP. In the intermediate run, the policy begins to improve public-sector efficiency and, hence, increases GNP. At the outset of the transition to a steady state, the pricing policy continues to improve efficiency. Nevertheless, efficiency and GNP remain invariant across steady states in the long-run equilibrium. The implications of the pricing policy are also discussed.

Original language	English
Pages (from-to)	555-571
Journal	Pacific Economic Review
Volume	7
Issue number	3
DOIs	https://doi.org/10.1111/1468-0106.00177
Publication status	Published - Oct 2002

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Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

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abstract = "This paper examines the resource allocation and income effects of public-sector pricing. During the short run, raising public-sector prices leads to a worsening in public-sector efficiency, causing a decline in GNP. In the intermediate run, the policy begins to improve public-sector efficiency and, hence, increases GNP. At the outset of the transition to a steady state, the pricing policy continues to improve efficiency. Nevertheless, efficiency and GNP remain invariant across steady states in the long-run equilibrium. The implications of the pricing policy are also discussed.",

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N2 - This paper examines the resource allocation and income effects of public-sector pricing. During the short run, raising public-sector prices leads to a worsening in public-sector efficiency, causing a decline in GNP. In the intermediate run, the policy begins to improve public-sector efficiency and, hence, increases GNP. At the outset of the transition to a steady state, the pricing policy continues to improve efficiency. Nevertheless, efficiency and GNP remain invariant across steady states in the long-run equilibrium. The implications of the pricing policy are also discussed.

AB - This paper examines the resource allocation and income effects of public-sector pricing. During the short run, raising public-sector prices leads to a worsening in public-sector efficiency, causing a decline in GNP. In the intermediate run, the policy begins to improve public-sector efficiency and, hence, increases GNP. At the outset of the transition to a steady state, the pricing policy continues to improve efficiency. Nevertheless, efficiency and GNP remain invariant across steady states in the long-run equilibrium. The implications of the pricing policy are also discussed.

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JF - Pacific Economic Review

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ER -

Public sector pricing, capital mobility and national income: A two-sector general-equilibrium analysis

Abstract

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