Fifteen years of efforts to promote fiscal decentralization in China have failed to promote economic growth in China's provinces. This finding is surprising in the light of arguments that fiscal decentralization usually promotes provincial or local economic growth.Zhang and Zou use data on China...

Empirical evidence shows that entrepreneurs hold a large fraction of wealth, have higher saving rates than workers, and face substantial uninsurable entrepreneurial and investment risks. This paper constructs a heterogeneous-agent general equilibrium model with uninsurable entrepreneurial risk...

Recent research has shown that the "spirit of capitalism"--a preference for wealth itself, in addition to consumption--has important implications for growth and asset pricing. This paper explores how the spirit of capitalism affects saving and consumption behavior. We demonstrate that the spirit...

According to Schumpeter (1934), entrepreneurs are driven to innovate not for the fruits of success but for success itself. This description of entrepreneurship echoes Weber’s (1958 ) description of the “spirit of capitalism,” which states that people enjoy the accumulation of wealth...

Although theoretical models make distinct predictions about the relation between finance and income inequality, little empirical research has been conducted to compare their relative explanatory power. We examine the relation between financial intermediary development and income inequality in a...

The paper shows that income inequality may theoretically lead to higher economic growth if public consumption enters the utility function. Empirically, baseline estimations and a sensitivity analysis show that income inequality is positively, and most of the time significantly, associated with...

Although theoretical models make distinct predictions about the relationship between financial sector development and income inequality, little empirical research has been conducted to compare their relative explanatory power. The authors examine the relation between financial intermediary...