Boosting public production stabilizes slow growth economies, maximizes social welfare.
The article explores how public production can help stabilize slow-growing economies. By adjusting the endogenous growth model, the researchers found that more intervention is needed when people are less willing to wait for future benefits. Even a small amount of public production can help prevent economic instability when private production decreases. Using public funds for long-term infrastructure projects can also help keep the economy steady. The study shows that with the right balance of public and private production, economies can be more stable and less prone to fluctuations.