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Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis

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  • Rehme, Günther

Abstract

This paper analyzes the interplay of growth, (re-)distribution and policies when the latter are set exogenously or when the latter depend on economically important fundamentals. A redistribution policy generally causes lower growth, but less so when there is technological progress. The model implies that high (endogenous) tax rates may not necessarily imply low growth. The paper shows that the longrun cross-country relationship between growth and endogenous policy is generally not clear-cut. But this relies on conditions that can be used for identification in empirical research. The paper also argues that workers benefit more from technical progress than capital owners, even though inequality might and growth would rise.

Suggested Citation

  • Rehme, Günther, 2009. "Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 77411, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:77411
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/77411/
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    Cited by:

    1. Rehme, Günther, 2014. "Endogenous (re-)distributive policies and economic growth: A comparative static analysis," Economic Modelling, Elsevier, vol. 40(C), pages 355-366.
    2. Nakabayashi, Masaki, 2019. "From family security to the welfare state: Path dependency of social security on the difference in legal origins," Economic Modelling, Elsevier, vol. 82(C), pages 280-293.
    3. Awaworyi Churchill, S. & Yew, S.L., 2017. "Are government transfers harmful to economic growth? A meta-analysis," Economic Modelling, Elsevier, vol. 64(C), pages 270-287.
    4. Günther Rehme, 2011. "Endogenous Policy And Cross‐Country Growth Empirics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(2), pages 262-296, May.

    More about this item

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • D3 - Microeconomics - - Distribution
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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