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Property Rights and Growth


  • Holger Strulik


  • Ines Lindner



The paper analyses the long-run equilibrium and adjustment dynamics in models of economic growth where property rights are absent. A comparison with the standard models assesses the importance of property rights quantitatively. In the neoclassical growth model individuals arrive at a lower steady-state level of consumption. The absolute convergence hypothesis does not longer hold. An augmented non--linear Ak economy is capable of long-run growth without institutional arrangements if this holds true for an otherwise identical economy with secure property rights. The lawless economy, however, approaches a lower long-run growth rate which is only up to about half of that of an economy with secure property rights. This is due to a lower investment rate despite identical long--run capital productivity. The model, therefore, can explains conditional convergence.

Suggested Citation

  • Holger Strulik & Ines Lindner, 1999. "Property Rights and Growth," Quantitative Macroeconomics Working Papers 19904, Hamburg University, Department of Economics.
  • Handle: RePEc:ham:qmwops:19904

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    References listed on IDEAS

    1. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    2. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
    3. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    4. Lucas, Robert E, Jr, 1990. "Supply-Side Economics: An Analytical Review," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 293-316, April.
    5. Benhabib, Jess & Rustichini, Aldo, 1996. "Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-142, March.
    6. Richard B. Freeman & David L. Lindauer, 1999. "Why Not Africa?," NBER Working Papers 6942, National Bureau of Economic Research, Inc.
    7. Masao Ogaki & Carmen M. Reinhart, 1998. "Measuring Intertemporal Substitution: The Role of Durable Goods," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 1078-1098, October.
    8. Larry E. Jones & Rodolfo Manuelli, 1990. "A Convex Model of Equilibrium Growth," NBER Working Papers 3241, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Mino, Kazuo, 2006. "Voracity vs. Scale Effect in a Growing Economy," MPRA Paper 16999, University Library of Munich, Germany.
    2. Tiago Sequeira, 2004. "Mortality Rate and Property Rights in a Model with Human Capital and R&D," Development and Comp Systems 0408010, EconWPA.
    3. Mino, Kazuo, 2006. "Voracity vs. scale effect in a growing economy without secure property rights," Economics Letters, Elsevier, vol. 93(2), pages 278-284, November.

    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General


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