Voracity and Growth

Philip Lane and Aaron Tornell

No 2001, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyse an economy that lacks a strong legal-political institutional infrastructure and is populated by multiple powerful groups. Powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock. In equilibrium, this leads to slow economic growth and a 'voracity effect', by which a shock, such as a terms of trade windfall, perversely generates a more than proportionate increase in fiscal redistribution and reduces growth. We also show that a dilution in the concentration of power leads to faster growth and a less pro-cyclical response to shocks.

Keywords: Differential Games; Economic Growth; Natural Resources; Terms of Trade; voracity (search for similar items in EconPapers)
JEL-codes: F43 O10 O23 O40 (search for similar items in EconPapers)
Date: 1998-10
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Citations: View citations in EconPapers (37)

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Related works:
Working Paper: Voracity and Growth (1998)
Working Paper: Voracity and Growth (1997)
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