The euro area crisis drags on. Austerity measures in the crisis countries are deepening an already severe recession and this is having knock-on effects on the entire currency area. Policymakers have largely ignored the central cause of the crisis - the persistent failure by member states to keep...

This paper questions the three standard propositions used by politico-economic models of growth and distribution according to which (1) rising inequality induces more government redistribution; (2) more government redistribution is financed by higher distortionary taxation; and (3) higher...