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Moreover, this optimal policy corresponds to the public investmentratio that maximizes growth.
The second row reports the public investmentratio that is consistent with a constant growth rate.
Even though we cannot obtain an explicit expression for the optimal public investmentratio, careful examination of the implicit condition reveals important findings.
In addition to influencing the optimal public investmentratio directly, these parameters may also affect optimal policy indirectly, through their effect on the endogenous rate of growth.
The optimal public investmentratio is lower for low-growth economies, as well as for economies populated by consumers with a low preference for substituting consumption intertemporally.
It said that these are the motives which lead to a high rate of investment and a high output investmentratio.
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