Endogenous (re-)distributive policies and economic growth: a comparative static analysis

Günther Rehme

No 185, Darmstadt Discussion Papers in Economics from Darmstadt University of Technology, Department of Law and Economics

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 long-run 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 mthat workers benefit more from technical progress than capital owners, even though inequality might and growth would rise.

Keywords: Growth; Distribution; Endogenous Policy (search for similar items in EconPapers)
JEL-codes: D3 H2 O4 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Endogenous (re-)distributive policies and economic growth: A comparative static analysis (2014)
Working Paper: Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis (2009)
Working Paper: Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis (2007)
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