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Regional redistribution policy and welfare in a two-region endogenous growth model

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  • Yutaro Murakami

    () (Graduate School of Economics, Osaka University)

Abstract

This paper constructs a two-region endogenous growth model with productive government expenditure to analyze the relationship between regional redistribution of public input and the welfare of residents in each region. This paper shows that the redistribution policy may be Pareto improving if the distribution rate of a more populous region is increased because it raises the equilibrium growth rate. Furthermore, the higher the inequalities between the labor populations are, the greater the possibility of a Pareto improving policy.

Suggested Citation

  • Yutaro Murakami, 2005. "Regional redistribution policy and welfare in a two-region endogenous growth model," Discussion Papers in Economics and Business 05-07, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:0507
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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0507.pdf
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    References listed on IDEAS

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    1. Turnovsky, Stephen J, 1996. "Fiscal Policy, Adjustment Costs, and Endogenous Growth," Oxford Economic Papers, Oxford University Press, vol. 48(3), pages 361-381, July.
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    7. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
    8. Xie, Danyang & Zou, Heng-fu & Davoodi, Hamid, 1999. "Fiscal Decentralization and Economic Growth in the United States," Journal of Urban Economics, Elsevier, vol. 45(2), pages 228-239, March.
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    13. Futagami, Koichi & Morita, Yuichi & Shibata, Akihisa, 1993. " Dynamic Analysis of an Endogenous Growth Model with Public Capital," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 607-625, December.
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    15. Martin, Philippe, 1999. "Public policies, regional inequalities and growth," Journal of Public Economics, Elsevier, pages 85-105.
    16. Martin, Philippe, 1999. "Public policies, regional inequalities and growth," Journal of Public Economics, Elsevier, pages 85-105.
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    More about this item

    Keywords

    Endogenous growth; Government expenditure; Regional distribution; Welfare; Pareto improving policy;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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