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A Macroeconomic Model with Property-Rights Capital

Author

Listed:
  • Minxian Sun

    (China Economics and Management Academy, Central University of Finance and Economics)

  • Heng-Fu Zou

    (The World Bank
    Institute for Advanced Study, Wuhan University)

Abstract

Property-rights capital stands as a fragile entity, encountering obstacles, regressions, and challenges worldwide. This underscores the necessity to endogenize both property-rights capital accumulation and physical capital accumulation within an integrated dynamic framework. This paper explores the complex interplay between economic variables and institutional capital. The study reveals that property-rights capital, serving as institutional capital, is deeply interconnected with the accumulation of physical capital, economic growth, and development. Notably, when the cost of property-rights capital formation rises, it results in decreased long-run property-rights investment, the accumulation of property-rights capital, physical capital, and consumption. An increase in the depreciation rate of property-rights capital and a decline in total factor productivity would impact property-rights capital similarly.

Suggested Citation

  • Minxian Sun & Heng-Fu Zou, 2025. "A Macroeconomic Model with Property-Rights Capital," Annals of Economics and Finance, Society for AEF, vol. 26(1), pages 213-246, May.
    • Handle: RePEc:cuf:journl:y:2025:v:26:i:1:sunzou
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    Keywords

    Property rights; Property-rights capital; Institutional capital; Rule of law; Economic growth; Economic development;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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