Property rights and long?run capital

Proprietary capital falling into the public domain inefficiently decreases accumulation. As a consequence, market steady state consumption underperforms planner's by 4.6%–9.1% in neoclassical infinitely-lived agents economy with constant returns to scale and standard empirically supported parameters. The results extend robustly an overlapping generations economy, for which gap is 10.5% when similarly parametrized. A policy decentralizing, latter, instead consists of (i) subsidizing rental rate private at its depreciation rate, (ii) taxing households' negative net position between, on one hand, firm depreciated ownership, other, borrowing. Under this policy, necessary tax smaller bigger absolute value latter and, hence, corresponding monetary real balances held households.