THE EVOLUTION OF A RENTIER ECONOMY AND THE SUPPRESSION OF ECONOMIC WELFARE

Savvakis Savvides

No 2024-06, Development Discussion Papers from JDI Executive Programs

Abstract: The paper highlights the importance of a fair distribution of wealth among the economic agents of a country so that the benefits of a free-market economy work efficiently and create new wealth that fosters economic welfare are at work and functioning efficiently. Extreme inequality and a dysfunctional banking system deprives the market economy from entrepreneurial skills and innovation. In addition, the risk aversion attitudes of the wealthy lead to an elusive pursuit of return without the risk, but which inevitably, through a dysfunctional banking system, results in the transfer of existing wealth from the many to the very few rather than creating new wealth. And the real economy is thereby trapped in a vicious circle which further exaggerates wealth concentration and inequality.

Keywords: Economic development; wealth; inequality; risk analysis; project evaluation; corporate lending; credit risk. (search for similar items in EconPapers)
JEL-codes: D61 G17 G21 G32 G33 H43 (search for similar items in EconPapers)
Pages: 6 Pages
Date: 2024-04-23
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Persistent link: https://EconPapers.repec.org/RePEc:qed:dpaper:4619

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