Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/68909
Authors: 
Harms, Philipp
Zink, Stefan
Year of Publication: 
2000
Series/Report no.: 
Diskussionsbeiträge: Serie 1, Fachbereich Wirtschaftswissenschaften, Universität Konstanz 305
Abstract: 
In this paper we offer an explanation why a poor majority does not necessarily expropriate a rich minority. We present a dynamic model in which individuals are willing to accept an unequal distribution of income in the current period if they are sufficiently optimistic about their future economic prospects. In this case, the fact that a policy of radical redistribution inflicts a persistent damage on the economy and thus reduces agents' future earning possibilities prevents the poor from expropriating the rich. Unlike previous contributions, we do not assume exogenous changes of the income distribution, but relate such changes to agents' rational investment decisions.
Subjects: 
political economy
inequality
redistribution of income
JEL: 
D31
D72
P16
Document Type: 
Working Paper

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