【主题】Dynamic Public Good Provision under Irreversibility and Complementarity
【摘要】We study public good provision and technology investment when two parties alternate political control stochastically. In each period, the incumbent decides how much public good to provide and how much to invest in a technology that lowers the future cost of public good provision. The two parties value public good differently (party $H$ assigns a higher weight and $L$ a lower weight). This difference represents the degree of polarization. We obtain the following results in Markov Perfect equilibrium in the infinite-horizon game: (i) When polarization is low, steady-state distribution is invariant to the degree of reversibility of the investment. When polarization is high, party $H$ invests more in technology and both parties provide more public good in steady state when investment is irreversible than when reversible. (ii) Higher power turnover results in higher levels of technology stock and more public good provision if polarization is low. (iii) Under high power turnover, as parties get more polarized, the expected technology stock and provision of public good in steady state first fall, then jump upward as irreversibility starts to bind.
【报告人简介】Liuchun Deng is an assistant professor of economics at Yale-NUS College. His research focuses on the labor market and productivity consequences of automation and international trade. He also works on the theory of economic dynamics with applications to development, political economy, and trade. Liuchun Deng holds a Ph.D. in Economics from Johns Hopkins University.