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Endogenous (re-)distributive policies and economic growth: a comparative static analysis

Listed author(s):
  • Rehme, Günther

This paper analyzes the interplay of growth, (re-)distribution and policies when the latter are set exogenously or when the latter depend on economically important fundamentals. A redistribution policy generally causes lower growth, but less so when there is technological progress. The model implies that high (endogenous) tax rates may not necessarily imply low growth. The paper shows that the long-run cross-country relationship between growth and endogenous policy is generally not clear-cut. But this relies on conditions that can be used for identification in empirical research. The paper also argues mthat workers benefit more from technical progress than capital owners, even though inequality might and growth would rise.

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File URL: https://www.econstor.eu/bitstream/10419/32082/1/538465484.PDF
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Paper provided by Darmstadt University of Technology, Department of Law and Economics in its series Darmstadt Discussion Papers in Economics with number 185.

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Date of creation: 2007
Handle: RePEc:zbw:darddp:dar_35714
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