Resource title

Insecure property rights and growth : the roles of appropriation costs, wealth effects, and heterogeneity

Resource image

image for OpenScout resource :: Insecure property rights and growth : the roles of appropriation costs, wealth effects, and heterogeneity

Resource description

We extend the model of insecure property rights by Tornell and Velasco (1992) and Tornell and Lane (1999) by adding three features: (i) extracting the common property asset involves a private appropriation cost, (ii) agents derive utility from wealth as well as from consumption, and (iii) agents can be heterogeneous. We show that both an increase in the appropriation cost and, when appropriation costs vary across agents, an increase in the degree of heterogeneity of these costs reduce the growth rate of the public capital stock. We also show that, in the interior equilibrium, the private asset can have either a lower or a higher money rate of return than the common property asset.

Resource author

Ngo van Long, Gerhard Sorger

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18891

Resource license

Adapt according to the presented license agreement and reference the original author.