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Poverty, Voracity, and Growth

  • Strulik, Holger

This article investigates economic performance when enforceable property rights are missing and basic needs matter for consumption. It suggests a new view of the so-called voracity effect according to which windfall gains in productivity induce behavior that leads to lower economic growth. Taking into account that the rate of intertemporal substitution in consumption depends on the level of consumption, it is shown that "voracious behavior" is situation-specific. It occurs when an economy is in decline and suffciently close to stagnation.

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File URL: http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-473.pdf
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Paper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Hannover Economic Papers (HEP) with number dp-473.

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Length: 21 pages
Date of creation: May 2011
Date of revision:
Handle: RePEc:han:dpaper:dp-473
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  1. Bates, Robert H. & Coatsworth, John H. & Williamson, Jeffrey G., 2007. "Lost Decades: Postindependence Performance in Latin America and Africa," Scholarly Articles 12211559, Harvard University Department of Economics.
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  4. Rodrik, Dani, 1998. "Where Did all the Growth Go? External Shocks, Social Conflict and Growth Collapses," CEPR Discussion Papers 1789, C.E.P.R. Discussion Papers.
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  9. Keefer, Philip & Knack, Stephen, 2002. " Polarization, Politics and Property Rights: Links between Inequality and Growth," Public Choice, Springer, vol. 111(1-2), pages 127-54, March.
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  18. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  19. Holger Strulik & Ines Lindner, 1999. "Why not Africa? -- Growth and Welfare Effects of Secure Property Rights," Quantitative Macroeconomics Working Papers 19909, Hamburg University, Department of Economics.
  20. Steger, Thomas M., 2000. "Economic growth with subsistence consumption," Journal of Development Economics, Elsevier, vol. 62(2), pages 343-361, August.
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  22. Strulik, Holger, 2009. "Patience and Prosperity," Hannover Economic Papers (HEP) dp-426, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
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  26. José Garcia Montalvo & Marta Reynal-Querol, 2004. "Ethnic polarization, potential conflict and civil wars," Economics Working Papers 770, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2005.
  27. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January.
  28. Strulik, Holger, 2008. "A Note on Economic Growth with Subsistence Consumption," Hannover Economic Papers (HEP) dp-405, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  29. Lucas, Robert E, Jr, 1990. "Supply-Side Economics: An Analytical Review," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 293-316, April.
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  32. repec:fth:harver:1435 is not listed on IDEAS
  33. Brander, James A & Taylor, M Scott, 1998. "The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use," American Economic Review, American Economic Association, vol. 88(1), pages 119-38, March.
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