THE OPTIMAL LEVELS OF INFRASTRUCTURE IN AN ECONOMY: AN INPUT-OUTPUT APPROACH AND THE FULL FEED-BACK RELATIONS

Authors : Metin ARSLAN

Pages : 83-94

View : 49 | Download : 24

Publication Date : 2000-07-01

Article Type : Research Paper

Abstract :Within the Input-Output framework, an infrastructure matrix is proposed, using the seven-category infrastructure scheme on the basis of sector of origin versus destination, to satisfy the question of how much and what kind of infrastructure is needed in an economy for optimal growth. Â seven-category infrastructure classification scheme is proposed to allow infrastructure matrices to be constructed for use as planning technologies, and the necessary capital stock variables to be defined for studying the economic impact of infrastructure. This study aims at answering policy questions concerning the optimal levels of infrastructure in a framework consistent with the multidisciplinary nature ofthe infrastructure problem. Attempts to guide public policy on infrastructure are hampered by two problems, First is the failure of competing economic paradigms to develop satisfactory methods of accounting for the economic impact of infrastructure. Second is the cumbersome system of classifying infrastructure categories because infrastructure is used as an umbrella term for a collection of diverse private and public systems.
Keywords : Optimal infrastructure, Economic impact of infrastructure, Public policy

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