Abstract
The purpose of this study is to build an CGE model in the context of OLG model in order to evaluate optimal policy rules for provision of social overhead capital. The model includes a capital stock both of social overhead and private sections among economical behavior of industry and household, and evaluates economical effects of the two kinds of capital stocks. The model can explain productivity effects of social overhead capital, intergenerational income distribution effect of public loan, and substitutability between public service and social overhead capital. Empirical simulation based on macroeconomical data reveals the relationship between policy changes and social welfares, and the relationship between change of social economical conditions and optimal policy rule.
