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Economic growth and (re-)distributive policies in a non-cooperative world

Rehme, Günther :
Economic growth and (re-)distributive policies in a non-cooperative world.
[Online-Edition: http://econstor.eu/bitstream/10419/32095/1/516794493.PDF]
In: Darmstadt Discussion Papers in Economics , 175 . Darmstadt
[Report], (2006)

Offizielle URL: http://econstor.eu/bitstream/10419/32095/1/516794493.PDF

Kurzbeschreibung (Abstract)

Many models show that redistribution is bad for growth. This paper argues that in a non-cooperative world optimizing, redistributing (’left-wing’) governments mimic non-redistributing (’right-wing’) policies for fear of capital loss if capital markets become highly integrated and the countries are technologically similar. ’Left-right’ competition leads to more redistribution and lower GDP growth than ’left-left’ competition. Efficiency differences allow for higher GDP growth and more redistribution than one’s opponent. Irrespective of efficiency differences, however, ’left-wing’ governments have higher GDP growth when competing with other ’left-wing’ governments. The results may explain why one observes a positive correlation between redistribution and growth across countries, and why capital inflows and current account deficits may be good for relatively high growth.

Typ des Eintrags: Report
Erschienen: 2006
Autor(en): Rehme, Günther
Titel: Economic growth and (re-)distributive policies in a non-cooperative world
Sprache: Englisch
Kurzbeschreibung (Abstract):

Many models show that redistribution is bad for growth. This paper argues that in a non-cooperative world optimizing, redistributing (’left-wing’) governments mimic non-redistributing (’right-wing’) policies for fear of capital loss if capital markets become highly integrated and the countries are technologically similar. ’Left-right’ competition leads to more redistribution and lower GDP growth than ’left-left’ competition. Efficiency differences allow for higher GDP growth and more redistribution than one’s opponent. Irrespective of efficiency differences, however, ’left-wing’ governments have higher GDP growth when competing with other ’left-wing’ governments. The results may explain why one observes a positive correlation between redistribution and growth across countries, and why capital inflows and current account deficits may be good for relatively high growth.

Reihe: Darmstadt Discussion Papers in Economics
Band: 175
Ort: Darmstadt
Freie Schlagworte: Growth, Distribution, Tax Competition, Capital Mobility
Fachbereich(e)/-gebiet(e): 01 Fachbereich Rechts- und Wirtschaftswissenschaften
01 Fachbereich Rechts- und Wirtschaftswissenschaften > Volkswirtschaftliche Fachgebiete > Fachgebiet Wirtschaftstheorie
01 Fachbereich Rechts- und Wirtschaftswissenschaften > Volkswirtschaftliche Fachgebiete
Hinterlegungsdatum: 20 Nov 2008 08:22
Offizielle URL: http://econstor.eu/bitstream/10419/32095/1/516794493.PDF
Zusätzliche Informationen:

JEL classification: O4, H21, D33, C72, F21

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