Voracity vs. Scale Effect in a Growing Economy
AbstractThis paper extends the standard model of growth with insecure property rights by introducing variable labor supply and increasing returns to scale. It is assumed that capital stock is jointly owned by multiple interest groups and that each group participates production activities by supplying its labor force. In this setting, there are two opposing factors that affect growth: over consumption in the absence of secure property rights and the scale effect due to the presence of increasing returns. The growth performance of the economy thus depends on which factor dominates.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 16999.
Date of creation: Sep 2006
Date of revision:
common property; growth; increasing returns; endogenous labor supply; differential game;
Find related papers by JEL classification:
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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- Holger Strulik & Ines Lindner, 1999.
"Property Rights and Growth,"
Quantitative Macroeconomics Working Papers
19904, Hamburg University, Department of Economics.
- Pelloni, A. & Waldmann, R., 1997.
"Stability Properties in a Growth Model,"
Economics Working Papers
eco97/11, European University Institute.
- Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
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