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Inequality and Growth: The Role of Beliefs and Culture

Martin Strieborny

No 2013:15, Working Papers from Lund University, Department of Economics

Abstract: Governments perpetually align their policies to satisfy shifts in voters' relative demand for economic growth versus social equality. Following such shifts, increases (decreases) in government interventions lower (raise) both inequality and growth. This mechanism generates a positive co-movement between inequality and growth. The pattern is weaker in countries where a culturally determined belief that the rich are deserving renders equality a less important objective in the first place. I develop this analytical result in the theoretical framework of Alesina and Angeletos (2005), and I provide robust empirical support for it in a panel of 38 countries over the period 1964-2004.

Keywords: culture; inequality; growth (search for similar items in EconPapers)
JEL-codes: O15 O40 P16 Z10 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2013-04-24
New Economics Papers: this item is included in nep-fdg, nep-ltv, nep-pbe, nep-pol and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Inequality and Growth: The Role of Beliefs and Culture (2010) Downloads
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