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Endogenous Redistributive Cycles An Overlapping Generations Approach to Social Conflict and Cyclical Growth

Author

Listed:
  • Christiane Clemens

    () (Economics Department, University of Hannover)

  • Maik Heinemann

    () (Institute of Economics, University of Lüneburg)

Abstract

This paper discusses the emergence of endogenous redistributive cycles in a stochastic growth model with incomplete asset markets and heterogeneous agents, where agents vote on the degree of progressivity in the tax-transfer-scheme. The model draws from Bénabou (1996) and ties the bias in the distribution of political power to the degree of inequality in the society, thereby triggering redistributive cycles which then give rise to a nonlinear, cyclical pattern of savings rates, growth and inequality over time.

Suggested Citation

  • Christiane Clemens & Maik Heinemann, 2005. "Endogenous Redistributive Cycles An Overlapping Generations Approach to Social Conflict and Cyclical Growth," Working Paper Series in Economics 5, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:5
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Inequality; growth; political cycles; redistribution; Hopf bifurcation;

    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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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