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Economic growth and (re-)distributive policies in a non-cooperative world

Rehme, Günther :
Economic growth and (re-)distributive policies in a non-cooperative world.
In: Darmstadt Discussion Papers in Economics, 175. Darmstadt
[Report], (2006)

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Item Type: Report
Title: Economic growth and (re-)distributive policies in a non-cooperative world
Language: English
Abstract:

Many models show that redistribution is bad for growth. This paper argues that in a non-cooperative world optimizing, redistributing (’left-wing’) governments mimic non-redistributing (’right-wing’) policies for fear of capital loss if capital markets become highly integrated and the countries are technologically similar. ’Left-right’ competition leads to more redistribution and lower GDP growth than ’left-left’ competition. Efficiency differences allow for higher GDP growth and more redistribution than one’s opponent. Irrespective of efficiency differences, however, ’left-wing’ governments have higher GDP growth when competing with other ’left-wing’ governments. The results may explain why one observes a positive correlation between redistribution and growth across countries, and why capital inflows and current account deficits may be good for relatively high growth.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 175
Place of Publication: Darmstadt
Uncontrolled Keywords: Growth, Distribution, Tax Competition, Capital Mobility
Classification DDC: 300 Sozialwissenschaften > 330 Wirtschaft
Divisions: 01 Law and Economics
01 Law and Economics > Volkswirtschaftliche Fachgebiete > Economic Theory
01 Law and Economics > Volkswirtschaftliche Fachgebiete
Date Deposited: 20 Nov 2008 08:22
Last Modified: 29 Jan 2016 08:04
URN: urn:nbn:de:tuda-tuprints-47513
Additional Information:

JEL classification: O4, H21, D33, C72, F21

Additional Information:

JEL classification: O4, H21, D33, C72, F21

URI: http://tuprints.ulb.tu-darmstadt.de/id/eprint/4751
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