This paper generalizes the analysis of distributive con?ict, politics, and growth developed by by Alesina-Rodrik (1994 …). We construct a heterogenous-agent framework in which both growth and the distribution of wealth are endogenous. Due to … implies that the optimal tax rate is the same for all households and equals the growth maximizing tax rate. Hence, there is no …

relationship with weak banks experience a reduction in their loan supply and employment growth. Next, we estimate the effects of …

). We show that optimal policy that takes into account SPI transforms a standard concave growth model into a model with both … a poverty trap and endogenous growth. The resulting equilibrium dynamics inherit the properties of government policies … eliminate the poverty trap; when these conditions do not hold, "most" countries eventually reach a balanced growth path. The …

Is it politically feasible for governments to engineer endogenous growth? This paper illustrates two reasonable … political decision mechanisms by which fiscal policy generates endogenous growth with a single accumulable factor, under a … policies that target aggregates generate balanced growth and are Pareto optimal. Policies chosen by the median voter also …

Can a growing welfare state induce a regime switch in the growth rate of an economy? This paper constructs a dynamic … political economy model of economic growth and the welfare state in which both variables are non-linearly related and jointly … endogenous. Using a Markov switching framework over the period 1950-2001, we find that the structural decline in growth rates …