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


  • Rehme, Gunther


This paper analyzes the interplay of growth, distribution and public policies when the latter depend on economically important fundamentals. It is shown that not only pro-capital, but also pro-labour or income egalitarian policies lead to high growth. A wealth redistribution policy generally causes lower growth, but less so when there is technological progress. The model implies that high tax rates per se do not necessarily imply low growth. The paper argues that the long-run relationship between growth, post-tax factor incomes and public policies is more complicated in theory and especially when comparing countries as often suggested

Suggested Citation

  • Rehme, Gunther, 2000. "Economic Growth and (Re-)Distributive Policies: A Comparative Dynamic Analysis," Economics Working Papers ECO 2000-13, European University Institute.
  • Handle: RePEc:eui:euiwps:eco2000/13

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    References listed on IDEAS

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    Cited by:

    1. Günther Rehme, 2007. "Economic Growth and (Re-)Distributive Policies in a Non-cooperative World," Journal of Economics, Springer, vol. 91(1), pages 1-40, May.
    2. Rehme, Günther, 2014. "Endogenous (re-)distributive policies and economic growth: A comparative static analysis," Economic Modelling, Elsevier, vol. 40(C), pages 355-366.
    3. Toshiki Tamai, 2015. "Redistributive taxation, wealth distribution, and economic growth," Journal of Economics, Springer, vol. 115(2), pages 133-152, June.

    More about this item


    Growth; Distribution; Endogenous Policy;

    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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