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Submitted by Clifford Winston on
Shanta, In your blog post on the discussion about Young’s paper you say: The increased provision of education, health and infrastructure services also contribute to welfare, but are not captured in private consumption. Consider a Dixit-Stiglitz model of monopolistic competition where product diversity enters utility. Surely infrastructure improvements facilitate inventory cost savings (see the attached paper) that could lead to product diversity and benefit consumers, let alone private firms. http://blogs.worldbank.org/africacan/files/africacan/firm_inventory_behavior_and_the_returns_from_highway_infrastructure_investments.pdf I agree with your main point about African growth as I can only believe that it would be greatly enhanced by some semblance of a modern transportation system.