Abstract
This paper examines the possibility of immiserizing growth in an economy with a private and a pure public good. Our analysis shows that increases in resource endowments and/or technical improvements affecting the public good will be welfare-improving when the two commodities are normal and a Nash equilibrium exists. When substitution effects are strong, immiserizing growth is likely to characterize technical advances in the private good production.
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The authors gratefully acknowledge the helpful comments of two anonymous referees. Any remaining shortcomings are solely those of the authors.
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Cornes, R., Sandler, T. Public goods, growth, and welfare. Soc Choice Welfare 6, 243–251 (1989). https://doi.org/10.1007/BF00295862
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DOI: https://doi.org/10.1007/BF00295862