Voracity and Growth
AbstractWe analyze an economy that lacks a strong legal-political institutional infrastructure and is propulated by multiple powerful groups. Powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock. In equilibrium, this leads to slow economic growth and a "voracity effect," by which a shock, such as a terms of trade windfall, perversely generates a more than proportionate increase in fiscal redistribution and reduces growth. We also show that a dilution in the concentration of power leads to faster growth and a less procyclical response to shocks.
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Bibliographic InfoPaper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1807.
Date of creation: 1997
Date of revision:
Other versions of this item:
- Lane, Philip R. & Tornell, Aaron, 1998. "Voracity and Growth," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2001, C.E.P.R. Discussion Papers.
- Aaron Tornell & Philip R. Lane, 1998. "Voracity and Growth," NBER Working Papers 6498, National Bureau of Economic Research, Inc.
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
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- Easterly, William & Levine, Ross, 1997.
"Africa's Growth Tragedy: Policies and Ethnic Divisions,"
The Quarterly Journal of Economics, MIT Press,
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- Sachs, J-D & Warner, A-M, 1995.
"Natural Resource Abundance and Economic Growth,"
Papers, Harvard - Institute for International Development
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- Jan Gunning & Paul Collier, 1996. "Policy towards Commodity Shocks in Developing Countries," IMF Working Papers 96/84, International Monetary Fund.
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