Marginal Cost of Public Funds and Regulatory Regimes: Computable General Equilibrium Evaluation for Argentina

38 Pages Posted: 15 Dec 2010

See all articles by Omar Chisari

Omar Chisari

Universidad Argentina de la Empresa (UADE)

Martin Cicowiez

affiliation not provided to SSRN

Date Written: December 15, 2010

Abstract

We estimate the Marginal Cost of Public Funds for Argentina using a Computable General Equilibrium (CGE) model, assessing the sensitivity of the results to the existence of alternative regulatory regimes (price-cap and cost-plus) for public utilities subject to regulation. The estimates are in the range of international studies, and we confirm that the results are sensitive to the regulatory regime, to the presence of exempted goods, the existence of unemployment, the elasticity of labor supply, as well as to the degree of capital mobility, between sectors and internationally. In addition, our results highlight the existence of differential propensity to finance public projects under price-cap regimes vis-à-vis cost-plus regimes.

Keywords: Marginal cost public funds, regulation, general equilibrium, Argentina

JEL Classification: H22, D58, L5

Suggested Citation

Chisari, Omar and Cicowiez, Martin, Marginal Cost of Public Funds and Regulatory Regimes: Computable General Equilibrium Evaluation for Argentina (December 15, 2010). Revista de Análisis Económico/Economic Analysis Review, Vol. 25, No. 1, pp. 79-116, June 2010. Available at SSRN: https://ssrn.com/abstract=1725960

Omar Chisari (Contact Author)

Universidad Argentina de la Empresa (UADE) ( email )

1016 Buenos Aires
Argentina

Martin Cicowiez

affiliation not provided to SSRN ( email )

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