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Endogenous distribution, politics, and growth

Authors: Satya Das; Chetan Ghate;

Endogenous distribution, politics, and growth

Abstract

This paper generalizes the analysis of distributive con?ict, politics, and growth developed by by Alesina-Rodrik (1994). We construct a heterogenous-agent framework in which both growth and the distribution of wealth are endogenous. Due to adjustments in the distribution of wealth, the composition of factor ownership across households equalizes in the long run. This implies that the optimal tax rate is the same for all households and equals the growth maximizing tax rate. Hence, there is no distributive con?ict in the long run. When the model is augmented with a non-political redistributive policy, the model predicts that long run growth exhibits a negative monotonic relationship with respect to this policy, i.e., a redistributive policy that leads to a more equitable wealth distribution unambiguously reduces growth in the long run.

Keywords

Distributive Conflict, ddc:330, Endogenous Growth, O40, P16, Redistributive Policy, Einkommensumverteilung, Median Voter, Endogenous Growth, Wealth Distribution, Distributive Conflict, Redistributive Policy., Optimale Besteuerung, Median Voter, Einkommensverteilung, Wealth Distribution, Verteilungstheorie, Neue Wachstumstheorie, E62, D31, Theorie, jel: jel:E62, jel: jel:D31, jel: jel:O40, jel: jel:P16

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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