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Public Intangibles: The Public Sector and Economic Growth in the SNA
Author(s) -
Corrado Carol,
Haskel Jonathan,
JonaLasinio Cecilia
Publication year - 2017
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12325
Subject(s) - economics , public sector , subsidy , government (linguistics) , public economics , public capital , business , productivity , national income and product accounts , capital expenditure , finance , national accounts , public investment , market economy , economic growth , economy , public fund , linguistics , philosophy
This paper sets out a framework for analyzing the impact of public investments on industry‐level productivity and economic growth. The concept of capital in the public sector is broadened from that which is mostly tangible (e.g. physical infrastructure) to that which also includes intangibles and long‐lasting societal assets. For the analysis of public investments, we find that in addition to expanding the asset boundary, national accounts also need to: (a) impute a net return to government and other non‐market capital—or provide industry‐level data by institutional sector of origin, allowing researchers to do so; (b) include all public payments to industry in industry‐level gross operating surplus (i.e. all subsidies, production, and product, and the annuity value of investment grants); and (c) provide crosswalks for key components of government expenditure by function of government (e.g. public funds for extramural R&D or worker training) to kind‐of‐activity classifications used for industries.