Mean-spirited growth

Zachary Turk, Ben Groom and Eli Fenichel

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We contribute to the Solow-Swan strain of economic growth literature by integrating national distributional aspects into a dynamic model of economic growth. We show that country specific optimal growth policies balance distributional “preferences” against savings propensities of different percentiles of the emerging income distribution. We then present international comparisons of growth decomposition into distributional statistics and propose new measures of economic performance. Historical economic performance reveals heterogeneous patterns of inequality increasing (e.g. US, UK, Germany, China) and decreasing (e.g. Ireland, France, Netherlands, Vietnam) economic growth around the world. These comparisons reveal the implicit efficiency-equity trade-offs in each country’s set of national economic growth and social policies.

Keywords: Inequality; economic growth; distribution; the elasticity of marginal utility; preferences (search for similar items in EconPapers)
JEL-codes: D63 P17 P27 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2020-09-21
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:139544

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