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Wealth Concentration Leads To Wealth Extraction

Author

Listed:
  • Savvakis C. Savvides

    (Visiting Lecturer, John Deutsch International Executive Programs, Queen's University, Canada)

Abstract

The paper highlights the importance of good wealth distribution among the economic agents of a country so that the benefits of a free-market economy to work efficiently and create new wealth that fosters economic welfare are at work. Extreme inequality and a dysfunctional banking system deprives the market economy from entrepreneurial skills and innovation competencies. In addition, the risk aversion attitudes of the wealthy lead to an elusive pursuit of return without the risk, but which inevitably, through a failing banking system, results to transferring existing rather than creating new wealth and thereby further exaggerating wealth concentration and inequality.

Suggested Citation

  • Savvakis C. Savvides, 2024. "Wealth Concentration Leads To Wealth Extraction," Development Discussion Papers 2024-05, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4618
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    More about this item

    Keywords

    Economic development; risk analysis; project evaluation; corporate lending; credit risk.;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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