Resource title

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

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Resource description

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.

Resource author

Stefan Dietrich Josten, Achim Truger

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/23521

Resource license

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