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Factor Shares and Savings in Endogenous Growth


  • Bertola, Giuseppe


In models of steady investment-driven growth, an individual's propensity to save depends on how much of his income is drawn from accumulated factors of production ('capital') rather than from nonaccumulated factors. When agents are heterogeneous in this respect, growth-oriented policies have distributional consequences and, in the absence of lump-sum redistribution, their implementation faces political constraints. If the median voter is capital-poor relative to the economy's representative agent, political interactions tend to slow down growth when policy acts on capital's income share and tend to accelerate it when investment subsidies are the policy instrument of choice. Copyright 1993 by American Economic Association.

Suggested Citation

  • Bertola, Giuseppe, 1993. "Factor Shares and Savings in Endogenous Growth," American Economic Review, American Economic Association, vol. 83(5), pages 1184-1198, December.
  • Handle: RePEc:aea:aecrev:v:83:y:1993:i:5:p:1184-98

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    References listed on IDEAS

    1. Levine, David I., 1991. "Cohesiveness, productivity, and wage dispersion," Journal of Economic Behavior & Organization, Elsevier, vol. 15(2), pages 237-255, March.
    2. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-1095, December.
    3. Gilboa, Itzhak & Schmeidler, David, 1988. "Information dependent games : Can common sense be common knowledge?," Economics Letters, Elsevier, vol. 27(3), pages 215-221.
    4. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General


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