A model of capital accumulation and rent-seeking

Paulo Barelli and Samuel de Abreu Pessôa

No 449, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: A simple model incorporating rent-seeking into the standard neoclassical model of capital accumulation is presented. It embodies the idea that the performance of an economy depends on the efficiency of its institutions. It is shown that welfare is positively affected by the institutional efficiency, although output is not necessarily so. It is also shown that an economy with a monopolistic rent-seeker performs better than one with a competitive rent-seeking industry.

Date: 2002-06-01
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Citations: View citations in EconPapers (7)

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Working Paper: A Model of Capital Accumulation and Rent-Seeking (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:449

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