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The paper examines the notion of a ‘developmental state’ and shows that China possesses the characteristics of a developmental state. It explains the political economy which generated such a state in China and in some other economies. It analyses the methods and mechanisms that were...
Persistent link: https://www.econbiz.de/10010570045
We show that in an AK model of endogenous growth with CRRA specifications for both private and public consumption goods, income inequality exerts theoretically ambiguous effects on the optimal capital tax rate and the economy¡¯s growth rate. In a calibrated version of the model, we find that...
Persistent link: https://www.econbiz.de/10009150740
Persistent link: https://www.econbiz.de/10001427980
Persistent link: https://www.econbiz.de/10000990778
Cross-country studies have found a negative relationship between income inequality and economic growth. The main problem with the cross-country analyses is the poor quality of the data on income distribution. This paper tests the robustness of the cross-country results to the use of a more...
Persistent link: https://www.econbiz.de/10014184728
Governments perpetually align their policies to satisfy shifts in voters' relative demand for economic growth versus social equality. Following such shifts, increases (decreases) in government interventions lower (raise) both inequality and growth. This pattern is stronger in egalitarian...
Persistent link: https://www.econbiz.de/10014185716
We suggest a dynamic game theoretic model to explain why resource abundance may lead to instability of democracy. Stationary Markov perfect equilibria of this game with four players – Politician, Oligarch, Autocrat and Public (voters) – are analyzed. Choosing a rate of resource rent tax,...
Persistent link: https://www.econbiz.de/10014186358
There are two innovations as compared to the previous literature on democratization and growth. First, not only the level of democracy is taken into account, but also changes in this level in the 1970s-1990s as measured by the political rights indices of the Freedom House. Second, the...
Persistent link: https://www.econbiz.de/10014186359
In this paper, a new approach to disclose the impact of politics on economic growth is presented: we use data derived from content analysis of party manifestos as measures of party preferences. In a panel of 23 OECD countries, we detect a positive impact of party support for various...
Persistent link: https://www.econbiz.de/10014187105
Living in a democratic society has been internationally recognized as a basic human right. While most of the literature tries to identify the effect of democracy on economic prosperity, little work has been done to understand the determinants of economic growth under democracy. This paper...
Persistent link: https://www.econbiz.de/10014050291