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Redistribution and Economic Growth in Integrated Economies

Rehme, Günther (2004):
Redistribution and Economic Growth in Integrated Economies.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Online-Edition: http://econstor.eu/bitstream/10419/22524/1/ddpie_141.pdf],
[Report]

Abstract

Many theoretical models show that redistribution causes low growth or capital outflows even though empirically redistribution and growth are often found to be positively associated across countries. This paper argues that tax competition and the danger of capital outflows leads optimizing governments to pursue high growth, no redistribution policies in technologically similar economies. However, the government of a technologically superior economy may attract foreign and domestically owned capital and may have relatively higher GDP growth and more resources for redistribution than in a closed economy. Thus, redistributing governments may have a relatively stronger interest in technological advance or high economic integration. The results imply that one may well observe a positive association between redistribution and growth across countries.

Item Type: Report
Erschienen: 2004
Creators: Rehme, Günther
Title: Redistribution and Economic Growth in Integrated Economies
Language: English
Abstract:

Many theoretical models show that redistribution causes low growth or capital outflows even though empirically redistribution and growth are often found to be positively associated across countries. This paper argues that tax competition and the danger of capital outflows leads optimizing governments to pursue high growth, no redistribution policies in technologically similar economies. However, the government of a technologically superior economy may attract foreign and domestically owned capital and may have relatively higher GDP growth and more resources for redistribution than in a closed economy. Thus, redistributing governments may have a relatively stronger interest in technological advance or high economic integration. The results imply that one may well observe a positive association between redistribution and growth across countries.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 141
Place of Publication: Darmstadt
Uncontrolled Keywords: Growth; Redistribution; Tax Competition; Capital Mobility
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Economic Theory
Date Deposited: 20 Nov 2008 08:17
Official URL: http://econstor.eu/bitstream/10419/22524/1/ddpie_141.pdf
Additional Information:

JEL - Classification: O4, H21, D33, C72, C21, F21

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