WEALTH CONCENTRATION LEADS TO WEALTH EXTRACTION

Savvakis Savvides

No 2024-05, Development Discussion Papers from JDI Executive Programs

Abstract: The paper highlights the importance of good wealth distribution among the economic agents of a country so that the benefits of a free-market economy to work efficiently and create new wealth that fosters economic welfare are at work. Extreme inequality and a dysfunctional banking system deprives the market economy from entrepreneurial skills and innovation competencies. In addition, the risk aversion attitudes of the wealthy lead to an elusive pursuit of return without the risk, but which inevitably, through a failing banking system, results to transferring existing rather than creating new wealth and thereby further exaggerating wealth concentration and inequality.

Keywords: Economic development; risk analysis; project evaluation; corporate lending; credit risk. (search for similar items in EconPapers)
JEL-codes: D61 G17 G21 G32 G33 H43 (search for similar items in EconPapers)
Pages: 5 Pages
Date: 2024-04-23
New Economics Papers: this item is included in nep-hme
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Persistent link: https://EconPapers.repec.org/RePEc:qed:dpaper:4618

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