This paper develops a theory of socially determined aspirations, and the interaction of those aspirations with growth and inequality. The interaction is bidirectional: economy-wide outcomes determine individual aspirations, which in turn determine investment incentives and social outcomes. Thus...

This paper studies the political determinants of inequality in government interventions under the majoritarian and proportional representation systems. Using a model of electoral competition with targetable government intervention and heterogeneous localities, we uncover a novel relative...