Inequality, Politics, and Economic Growth. Three Critical Questions on Politico-Economic Models on Growth and Distribution

Stefan Dietrich Josten () and Achim Truger
Additional contact information
Stefan Dietrich Josten: Helmut Schmidt University, Hamburg, Postal: Dr. Stefan D. Josten, Institut fuer Finanzwissenschaft, Fachbereich WOW, Universitaet der Bundeswehr, Hamburg, Holstenhofweg 85, D-22043 Hamburg., Tel.: +49 (0)40 6541-2381, Fax: +49 (0)40 6541-2069

No 3/2003, Working Paper from Helmut Schmidt University, Hamburg

Abstract: This paper questions the three standard propositions used by politico-economic models of growth and distribution according to which (1) rising inequality induces more government redistribution; (2) more government redistribution is financed by higher distortionary taxation; and (3) higher distortionary taxes reduce economic growth. We present a variety of theoretical arguments demonstrating that all three propositions may be overturned by simply changing an assumption in a plausible way or adding a relevant real-world element to the basic models. The politico-economic models of growth and distribution, as well as the specific inequality-growth transmission channel they propose, must therefore be assessed as overly simplistic and inadequate with respect to the issues studied.

Keywords: Political Economy; Redistribution; Inequality; Economic growth (search for similar items in EconPapers)
JEL-codes: D72 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2003-06
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.hsu-hh.de/fgvwl/index_z8Js9oF3WApTLxMm.html Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.hsu-hh.de/fgvwl/index_z8Js9oF3WApTLxMm.html [301 Moved Permanently]--> https://www.hsu-hh.de/fgvwl/index_z8Js9oF3WApTLxMm.html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:vhsuwp:2003_003

Access Statistics for this paper

More papers in Working Paper from Helmut Schmidt University, Hamburg Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Bekcmann ( this e-mail address is bad, please contact ).