Transitional Dynamics in a Growth Model with Distributive Politics

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 than the growth maximizing tax rate. This slows growth down, but for a very different reason than in Alesina and Rodrik (1994)...

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Year of publication:	2006-06-24
Authors:	Ghate, Chetan
Institutions:	Max-Planck-Institut für Ökonomik <Jena>
Subject:	Politik \| Entwicklung \| Wachstum \| Nutzenfunktion \| Vertrieb \| distribution

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Extent:	662528 bytes 34 p. application/pdf
Series:	Max-Planck-Institut für Ökonomik - Abteilung Entrepreneurship, Growth and Public Policy Discussion Papers on Entrepreneurship, Growth and Public Policy ; 2206
Type of publication:	Book / Working Paper
Language:	English
Classification:	E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation ; O40 - Economic Growth and Aggregate Productivity. General ; P16 - Political Economy ; Sociological and psychological aspects ; Others ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

Persistent link: https://www.econbiz.de/10005864874