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Durham Research Online
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Rat race, redistribution, and growth.

Cozzi, G. (2004) 'Rat race, redistribution, and growth.', Review of economic dynamics., 7 (4). pp. 900-915.

Abstract

Introducing locally negatively interdependent preferences into a simple AK growth model easily explains the often observed insignificant or positive correlation between distortionary redistribution and growth rates. Positive capital income taxes and lump sum transfers are harmful for growth, but people rationally vote for them in order to reduce “rat race” overaccumulation. A “neutrality proposition” holds if the pivotal voter is the mean voter, as in a representative agent case, but it fails if the pivotal voter is poorer than the average citizen.

Item Type:Article
Full text:Full text not available from this repository.
Publisher Web site:http://dx.doi.org/10.1016/j.red.2004.05.002
Record Created:02 Mar 2010 16:50
Last Modified:03 Mar 2010 11:43

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