Conflict, Growth and Welfare: Can Increasing Property Rights Really be Counterproductive?
AbstractGonzalez (2007), JET, 137(1), 127-139, sets out a growth model with con- flict in which households allocate their resources across consumption, and investment in both productive and unproductive capital. A striking result is obtained: there are circumstances where increasing property rights in society can actually reduce social welfare and hence incremental changes are not nec- essarily in peoples’ interests. This note reassesses this claim in a generalized form of his model with a CRRA utility function (with a risk aversion param- eter, sigma > 1 rather than his logarithmic form) and we assume a less than full depreciation of capital. Both these generalizations prove to be critical ones that significantly change the result.
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Bibliographic InfoPaper provided by School of Economics, University of Surrey in its series School of Economics Discussion Papers with number 0109.
Length: 15 pages
Date of creation: Apr 2009
Date of revision:
Conflict; growth; property rights; welfare.;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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