Voracity and Growth
We analyze an economy that lacks a strong legal-political institutional infrastructure an dis populated by multiple powerful groups. Powerful groups dynamically interact via fiscal process that effectively allows open access to the aggregate capital stock. In equilibrium, this leads to slow economic growth and a voracity effect,' by which a shock, such as a terms of trade windfall, perversely generates a more than proportionate increase in fiscal redistribution and reduces growth. We also show that a dilution in the concentration of power leads to faster growth and a less procyclical response to shocks.
|Date of creation:||Apr 1998|
|Publication status:||Published as "Voracity and Growth in Discrete Time", EL, Vol. 62, no. 1(January 1999): 139-145.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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- William Easterly & Ross Levine, 1997.
"Africa's Growth Tragedy: Policies and Ethnic Divisions,"
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- Jan Gunning & Paul Collier, 1996. "Policy towards Commodity Shocks in Developing Countries," IMF Working Papers 96/84, International Monetary Fund. Full references (including those not matched with items on IDEAS)
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