Redistribution and Growth; Pareto Improvements

Gabriel Talmain () and C.F. Chou

UBC Departmental Archives from UBC Department of Economics

Abstract: This paper introduces heterogeneous households who have preferences for leisure into Grossman and Helpman's model of endogenous growth. Wealth distribution affects the endogenous rate of growth as the labor supply of each individual responds inversely to his permanent income. When the labor Engel curve is concave [convex], unequal wealth distribution decreases [increases] the rate of growth. Pareto- improving-growth-enhancing wealth redistributions are characterized.

Keywords: ECONOMIC GROWTH; WEALTH; HOUSEHOLD (search for similar items in EconPapers)
JEL-codes: D31 D90 O30 O41 (search for similar items in EconPapers)
Date: 1996
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Persistent link: http://EconPapers.repec.org/RePEc:ubc:bricol:96-03

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