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A Model of Capital Accumulation and Rent-Seeking

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  • Paulo Barelli
  • Samuel de Abreu Pess

Abstract

A simple model incorporating rent-seeking into the standard neoclassical model of capital accumulation is presented. It embodies the idea that the performance of an economy depends on the efficiency of its institutions. It is shown that welfare is positively affected by the institutional efficiency, although output is not necessarily so. It is also shown that an economy with a monopolistic rent-seeker performs better than one with a competitive rent-seeking industry.
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  • Paulo Barelli & Samuel de Abreu Pess, 2002. "A Model of Capital Accumulation and Rent-Seeking," Penn CARESS Working Papers 4392bb4732a00ee414b60ef8a, Penn Economics Department.
  • Handle: RePEc:cla:penntw:4392bb4732a00ee414b60ef8a7a592df
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    File URL: http://www.econ.upenn.edu/Centers/CARESS/CARESSpdf/02-06.pdf
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    Cited by:

    1. Veloso, Fernando A. & Ferreira, Pedro Cavalcanti & Pessôa, Samuel de Abreu, 2004. "The evolution of international output differences (1960-2000): From factors to productivity," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 548, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    2. Dzhumashev, Ratbek, 2008. "Corruption and Disposable Risk," MPRA Paper 11772, University Library of Munich, Germany.
    3. Djumashev, R, 2007. "Corruption, uncertainty and growth," MPRA Paper 3716, University Library of Munich, Germany.
    4. Djumashev, Ratbek, 2006. "Corrupt Bureaucracy and Growth," MPRA Paper 2082, University Library of Munich, Germany.
    5. Ratbek, Ratbek, 2010. "Nonlinear effect of corruption, uncertainty, and growth," MPRA Paper 24834, University Library of Munich, Germany.
    6. Ratbek Dzhumashev, 2006. "Public Goods, Corruption And Growth???," Monash Economics Working Papers 15/06, Monash University, Department of Economics.

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