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Public Infrastructure Investment, Output Dynamics, and Balanced Budget Fiscal Rules

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Figure

Figure 2: Stability Regions for Various Values of t L and σ C
Figure 3: Long-Run Effects of a Public Investment Impulse:
Figure 4: Dynamic Effects of a Permanent Public Investment Impulse: Various Values of ω LL Y (t)˜ q(t)˜ 0 20 40 60 80 100 120 140 160 180 200−0.03−0.02−0.0100.010.020.030.040.05 timeOutput 0 20 40 60 80 100 120 140 160 180 200−8−6−4−20246x 10−3timeQ K(t)˜
Figure 6: Dynamic Welfare Effects of Public Investment and Optimal Public Investment-to-GDP Ratio
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