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Do capitalistic institutions breed billionaires?

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  • Aloys Prinz

    () (University of Muenster)

Abstract

Abstract There is a new wave of interest in the inequality of income and wealth in the social sciences as well as in physics. On the top of the list are persons who own assets of US dollar 1 billion and more. Not much is known quantitatively of the distribution of these persons among countries. In this paper, it is analyzed empirically whether more capitalistic countries, as measured by index variables of economic freedom, exhibit a systematically larger number of billionaires in the year 2012 than less capitalistic countries. The main result is that the typical economic freedom indicators do not play a statistically significant role with respect to the number and wealth of billionaires, except the protection of property rights. In addition to that, according to further empirical results of the paper, billionaires may not be economically harmful for the respective countries as their existence, number and wealth is positively correlated with the GDP per head.

Suggested Citation

  • Aloys Prinz, 2016. "Do capitalistic institutions breed billionaires?," Empirical Economics, Springer, vol. 51(4), pages 1319-1332, December.
  • Handle: RePEc:spr:empeco:v:51:y:2016:i:4:d:10.1007_s00181-015-1058-0
    DOI: 10.1007/s00181-015-1058-0
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    References listed on IDEAS

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    Keywords

    Billionaires; Capitalism; Economic freedom; Property rights;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects

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