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Wirtschafts- und Sozialwissenschaftliches Institut (WSI), Düsseldorf >
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http://hdl.handle.net/10419/50470
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| Title: | | The political economy of growth and distribution: A theoretical critique  |
| Authors: | | Josten, Stefan Dietrich Truger, Achim |
| Issue Date: | | 2003 |
| Series/Report no.: | | WSI-Diskussionspapier 111 |
| Abstract: | | This paper reconsiders the political economy approach to growth and distribution according to which (1) rising inequality induces more government redistribution; (2) more government redistribution is financed by higher distortionary taxation; and (3) higher distortionary taxes reduce economic growth. We present a variety of theoretical arguments demonstrating that all three propositions may be overturned by simply changing an assumption in a plausible way or adding a relevant real-world element to the basal models. The political economy models of growth and distribution, as well as the specific inequality-growth transmission channel they propose, must therefore be assessed as overly simplistic and inadequate with respect to the issues studied. |
| Subjects: | | Political Economy Redistribution Inequality Economic growth |
| JEL: | | D72 D3 H2 O4 |
| Document Type: | | Working Paper |
| Appears in Collections: | | WSI-Diskussionspapiere, Wirtschafts- und Sozialwissenschaftliches Institut
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