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Redistribution and Growth: Pareto Improvements

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Author Info
 Chou, Chien-Fu
Talmain, Gabriel
Abstract

This paper analyzes the relationship between income distribution and economic growth. It introduces heterogeneous households who have preferences for leisure into Grossman and Helpman's model of endogenous growth (in which income distribution has no effect on economic growth). Wealth distribution affects the endogenous rate of growth as the labor supply of each individual responds inversely to his permanent income. When the labor Engel curve is concave (convex), unequal wealth distribution decreases (increases) the rate of growth. Pareto-improving-growth-enhancing wealth redistributions are characterized. Copyright 1996 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Journal of Economic Growth.

Volume (Year): 1 (1996)
Issue (Month): 4 (December)
Pages: 505-23
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Handle: RePEc:kap:jecgro:v:1:y:1996:i:4:p:505-23

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  1. Reto Foellmi und Josef Zweimüller, . "Inequality and Economic Growth - European Versus U.S. Experiences," IEW - Working Papers iewwp158, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  2. Chu, Angus C., 2009. "Global Poverty Reduction and Pareto-Improving Redistribution," MPRA Paper 16809, University Library of Munich, Germany. [Downloadable!]
  3. Foellmi, Reto & Zweimüller, Josef, 2005. "Income Distribution and Demand-Induced Innovations," CEPR Discussion Papers 4985, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Hyoungsoo Zang, 1997. "Technology Transfer, Income Distribution and the Process of Economic Development," Open Economies Review, Springer, vol. 8(3), pages 245-270, July. [Downloadable!] (restricted)
  5. Guido Cozzi, 2008. "Why the Rich Should Like R&D Less," Working Papers 2009_14, Department of Economics, University of Glasgow, revised Aug 2008. [Downloadable!]
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  6. Hatipoglu, Ozan, 2008. "Patent, Inequality and Innovation-Driven Growth," MPRA Paper 7855, University Library of Munich, Germany. [Downloadable!]
  7. Ozan Hatipoglu, 2007. "A Demand Based Theory of Income Distribution and Growth," Working Papers 2007/08, Bogazici University, Department of Economics. [Downloadable!]
  8. Debasis Bandyopadhyay & Parantap Basu, 2000. "The Growth-Inequality Relationship in a Model with Discrete Occupational Choice and Redistributive Tax," Econometric Society World Congress 2000 Contributed Papers 0809, Econometric Society. [Downloadable!]
  9. Josef Zweimueller, . "Inequality, Redistribution, and Economic Growth," IEW - Working Papers iewwp031, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  10. Cecilia García-Peñalosa & Jean-François Wen, 2008. "Redistribution and entrepreneurship with Schumpeterian growth," Journal of Economic Growth, Springer, vol. 13(1), pages 57-80, March. [Downloadable!] (restricted)
  11. Josef Zweimueller, . "Schumpeterian Entrepreneurs Meet Engel's Law: The Impact of Inequality on Innovation-Driven Growth," IEW - Working Papers iewwp009, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  12. Foellmi, Reto & Zweimüller, Josef, 2002. "Structural Change and the Kaldor Facts of Economic Growth," CEPR Discussion Papers 3300, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  13. Cecilia Garcia-Peñalosa & Jean-François Wen, 2004. "Redistribution and Occupational Choice in a Schumpeterian Growth Model," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  14. Ozan Hatipoglu, 2007. "Inequality and Growth. Where Are We Headed? A Survey," Working Papers 2007/07, Bogazici University, Department of Economics. [Downloadable!]
  15. Oded Galor, 2009. "Inequality and Economic Development: An Overview," Working Papers 2009-3, Brown University, Department of Economics. [Downloadable!]
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