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The political economy of growth and distribution: a theoretical critique
Zur neuen Politischen Ökonomie von Wachstum und Verteilung: eine theoretische Kritik
[working paper]
Corporate Editor
Wirtschafts- und Sozialwissenschaftliches Institut in der Hans-Böckler-Stiftung
Abstract "This paper reconsiders the political economy approach to growth and distribution according to which (1) rising inequality induces more government redistribution; (2) more government redistribution is financed by higher distortionary taxation; and (3) higher distortionary taxes reduce economic growt... view more
"This paper reconsiders the political economy approach to growth and distribution according to which (1) rising inequality induces more government redistribution; (2) more government redistribution is financed by higher distortionary taxation; and (3) higher distortionary taxes reduce economic growth. We present a variety of theoretical arguments demonstrating that all three propositions may be overturned by simply changing an assumption in a plausible way or adding a relevant real-world element to the basal models. The political economy models of growth and distribution, as well as the specific inequality-growth transmission channel they propose, must therefore be assessed as overly simplistic and inadequate with respect to the issues studied." (author's abstract)... view less
Keywords
redistribution; income; economic growth; taxes; political economy; distribution; inequality; economic theory
Classification
Political Economy
Public Finance
Method
theory formation; basic research
Free Keywords
political economy; redistribution; inequality; economic growth
Document language
English
Publication Year
2003
City
Düsseldorf
Page/Pages
27 p.
Series
WSI-Diskussionspapier, 111
Licence
Deposit Licence - No Redistribution, No Modifications
Data providerThis metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne