IDEAS home Printed from https://ideas.repec.org/p/ind/isipdp/03-06.html
   My bibliography  Save this paper

Endogenous distribution, politics and the growth-equity tradeoff

Author

Listed:
  • Satya P. Das

    () (Indian Statistical Institute, New Delhi)

  • Chetan Ghate

    () (Indian Statistical Institute, New Delhi)

Abstract

In comparison to the standard literature on inequality and growth which assumes the former to be exogenous, we formulate a model in which inequality and growth are both endogenous. Furthermore, long-run distribution, at least locally, is shown to be independent of the initial distribution of factor ownership. It is shown that exogenous policy changes that are primarily targeted towards growth and foster less inequality do enhance growth. But those that are primarily redistributive and imply more equal distribution reduce growth. This is consistent with recent empirical work which shows that inequality and growth may be positively related.

Suggested Citation

  • Satya P. Das & Chetan Ghate, 2003. "Endogenous distribution, politics and the growth-equity tradeoff," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 03-06, Indian Statistical Institute, New Delhi, India.
  • Handle: RePEc:ind:isipdp:03-06
    as

    Download full text from publisher

    File URL: http://www.isid.ac.in/~pu/dispapers/dp03-06.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kiminori Matsuyama, 2000. "Endogenous Inequality," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 743-759.
    2. Oded Galor & Omer Moav, 2000. "Das Human Kapital," Working Papers 2000-17, Brown University, Department of Economics.
    3. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-867, June.
    4. Das, Satya P., 2001. "Endogenous distribution and the political economy of trade policy," European Journal of Political Economy, Elsevier, vol. 17(3), pages 465-491, September.
    5. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    6. Jones, Larry E & Manuelli, Rodolfo E, 1990. "A Convex Model of Equilibrium Growth: Theory and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1008-1038, October.
    7. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Graziella Bertocchi, 2011. "The Vanishing Bequest Tax: The Comparative Evolution Of Bequest Taxation In Historical Perspective," Economics and Politics, Wiley Blackwell, vol. 23(1), pages 107-131, March.
    2. Chakrabarty Debajyoti & Chanda Areendam & Ghate Chetan, 2006. "Education, Growth, and Redistribution in the Presence of Capital Flight," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(2), pages 1-41, November.
    3. Chetan Ghate, 2005. "Transitional Dynamics in a Growth Model with Distributive Politics," Discussion Papers of DIW Berlin 514, DIW Berlin, German Institute for Economic Research.
    4. Chetan Ghate, 2007. "Voting, Wealth Heterogeneity, and Endogenous Labor Supply," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(4), pages 477-497, December.

    More about this item

    Keywords

    Median Voter; Endogenous Growth; Wealth Distribution; Distributive Conflict; Redistributive Policy;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ind:isipdp:03-06. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamprasad M. Pujar). General contact details of provider: http://edirc.repec.org/data/isindin.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.