Voracity and Growth

Aaron Tornell and Philip Lane

No 6498, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze an economy that lacks a strong legal-political institutional infrastructure an dis populated by multiple powerful groups. Powerful groups dynamically interact via 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 procyclical response to shocks.

JEL-codes: F43 O10 (search for similar items in EconPapers)
Date: 1998-04
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Published as "Voracity and Growth in Discrete Time", EL, Vol. 62, no. 1(January 1999): 139-145.

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