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Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis

Rehme, Günther (2007):
Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Online-Edition: http://econstor.eu/bitstream/10419/32082/1/538465484.PDF],
[Report]

Abstract

This paper analyzes the interplay of growth, (re-)distribution and policies when the latter are set exogenously or when the latter depend on economically important fundamentals. A redistribution policy generally causes lower growth, but less so when there is technological progress. The model implies that high (endogenous) tax rates may not necessarily imply low growth. The paper shows that the longrun cross-country relationship between growth and endogenous policy is generally not clear-cut. But this relies on conditions that can be used for identification in empirical research. The paper also argues that workers benefit more from technical progress than capital owners, even though inequality might and growth would rise.

Item Type: Report
Erschienen: 2007
Creators: Rehme, Günther
Title: Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis
Language: English
Abstract:

This paper analyzes the interplay of growth, (re-)distribution and policies when the latter are set exogenously or when the latter depend on economically important fundamentals. A redistribution policy generally causes lower growth, but less so when there is technological progress. The model implies that high (endogenous) tax rates may not necessarily imply low growth. The paper shows that the longrun cross-country relationship between growth and endogenous policy is generally not clear-cut. But this relies on conditions that can be used for identification in empirical research. The paper also argues that workers benefit more from technical progress than capital owners, even though inequality might and growth would rise.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 185
Place of Publication: Darmstadt
Uncontrolled Keywords: Growth, Distribution, Endogenous Policy
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: 26 Aug 2009 13:25
Official URL: http://econstor.eu/bitstream/10419/32082/1/538465484.PDF
Additional Information:

JEL - Classification : O4, D3, H2

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