China's fast growth has been accompanied by rising regional inequality, triggering debate over a policy trade-off between aggregate growth and equity. We set out a three-region model of China in which local government behavior affects local TFP dynamics, and regional inequality itself generates...

What is the relationship between inequality and growth? This question has occupied and fascinated social scientists for more than a century. This article critically reviews the recent empirical and theoretical literature on the complex interplay between inequality and economic growth. Inequality...

The distribution of human capital and income lies at the center of a nexus of forces that shape a country’s economic, institutional and technological structure. I develop here a unified model to analyze these interactions and their growth consequences. Five main issues are addressed. First, I...

A model of endogenous growth is presented, based on productive public expenditures, and featuring some degree of income inequality, and polarization in policy preferences. The main innovation lays in the political process determining capital taxation that relies, both on voting and on "influence...

National authorities are presently not willing to install a supranational authority vested with the competencies required to internalize global environmental externalities. Therefore we adopt a dynamic framework of two economies (i.e. Europe and rest of world) and analyze their strategic...