G. Cozzi
Rat race, redistribution, and growth
Cozzi, G.
Authors
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.
Citation
Cozzi, G. (2004). Rat race, redistribution, and growth. Review of Economic Dynamics, 7(4), 900-915. https://doi.org/10.1016/j.red.2004.05.002
Journal Article Type | Article |
---|---|
Publication Date | Oct 1, 2004 |
Deposit Date | Mar 2, 2010 |
Journal | Review of Economic Dynamics |
Print ISSN | 1094-2025 |
Publisher | Elsevier |
Peer Reviewed | Peer Reviewed |
Volume | 7 |
Issue | 4 |
Pages | 900-915 |
DOI | https://doi.org/10.1016/j.red.2004.05.002 |
Public URL | https://durham-repository.worktribe.com/output/1522077 |
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