Voracity and Growth
AbstractWe analyze an economy that lacks a strong legal-political institutional infrastructure an dis populated by multiple powerful groups. Powerful groups dynamically interact via 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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6498.
Date of creation: Apr 1998
Date of revision:
Publication status: Published as "Voracity and Growth in Discrete Time", EL, Vol. 62, no. 1(January 1999): 139-145.
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Other versions of this item:
- Philip R. Lane & Aaron Tornell, 1997. "Voracity and Growth," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1807, Harvard - Institute of Economic Research.
- 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.
- 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.
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MIT Press, vol. 112(4), pages 1203-50, November.
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