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A model of capital accumulation and rent-seeking

  • Barelli, Paulo
  • Pessoa, Samuel de Abreu
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    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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    File URL: http://bibliotecadigital.fgv.br/dspace/bitstream/10438/750/2/1297.pdf
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    Paper provided by FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil) in its series Economics Working Papers (Ensaios Economicos da EPGE) with number 449.

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    Date of creation: 01 Jun 2002
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    Handle: RePEc:fgv:epgewp:449
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