The conventional wisdom in the literature on capital controls and growth argues that capital controls increase the ability of a government to tax capitalists which proves detrimental for growth. To address this issue, we construct an OLG model to study the effect of capital controls on human...

We construct a simple political economy model with imperfect capital markets to explain infrastructure investments across Indian states. The model predicts that: i) the fixed cost of accessing the modern sector, ii) the initial stock of infrastructure, iii) median voter wealth, and iv)...

This paper constructs a one-sector growth model to examine the impact of political lobbying on the formation of fiscal policy. The model predicts that lobbying can induce endogenous regime switches, development traps, and a sub-optimal allocation of government expenditures between productive and...

We construct an overlapping generations model to study the effect of capital controls on human capital investments and the incidence of redistributive taxation in a growing economy. We argue that the conventional wisdom linking higher capital controls to lower growth is reproduced only when an...

In comparison to the standard literature on inequality and growth which assumes the former to be exogenous, we formulate a model in which inequality and growth are both endogenous. Long-run distribution, at least locally, is shown to be independent of the initial distribution of factor...

Following Bai (2004) and Bai and Ng (2004) we estimate a common factor representation of a panel of output series for India, disaggregated by 15 states and 14 broad industry groups. We find that a single common "V-Factor" accounts for a large part of the significant shift in the cross-sectional...

Does distributive conflict diminish during the course of economic development? This article outlines a model in which distribution, the tax rate and growth evolve endogenously over time. When voting occurs over a tax on capital, we show that the growth rate is maximized at the political...

We construct a simple political economy model with imperfect capital markets to explain infrastructure investements across Indian states. The model predicts that: i) the fixed cost of accessing the modern sector, ii) the initial stock of infrastructure, iii) median voter weath, and iv)...

This paper constructs a dynamic analysis of the growth and distribution models of Das and Ghate (2004) and Alesina and Rodrik (1994) when leisure is valued by agents. When leisure enters the utility function, we show that the tax rate on capital income chosen in a political equilibrium is lower...