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Wealth inequality, wealth constraints and economic performance

In: Handbook of Income Distribution

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  • Bardhan, Pranab
  • Bowles, Samuel
  • Gintis, Herbert

Abstract

Where such behaviors as risk-taking and hard work are not subject to complete contracts, some distributions of assets (for instance the widespread use of tenancy) may preclude efficient contractual arrangements. In particular, the distribution of wealth may affect: (a) residual claimancy over income streams; (b) exit options in bargaining situations; (c) the relative capacities of actors to exploit common resources; (d) the capacity to punish those who deviate from cooperative solutions; and (e) the pattern of both risk aversion and the subjective cost of capital in the population.

Suggested Citation

  • Bardhan, Pranab & Bowles, Samuel & Gintis, Herbert, 2000. "Wealth inequality, wealth constraints and economic performance," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 10, pages 541-603, Elsevier.
    • Handle: RePEc:eee:incchp:1-10
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