Journal article

Are Status Concerns Harmful for Growth?

BP2-STS

  • 1998
Published in:
  • FinanzArchiv / Public Finance Analysis. - Mohr Siebeck Verlag. - 1998, vol. 55, no. 3, p. 357-373
English This paper explores the impact of status orientation on both savings behavior and factor income redistribution in an endogenous growth model with majority voting. If a steady state exists, in an equilibrium for given policy variables the effect of status preferences on investment-driven growth depends on the degree of relative risk aversion. Allowing for endogenous tax policies, desired saving incentives and thus growth rates are altered by status concerns, i.e. redistributive capital income tax rates rise with status orientation of the (capital-poor) median voter, unambiguously depressing growth.
Faculty
Faculté des sciences économiques et sociales et du management
Department
Département d'économie politique
Language
  • English
Classification
Economics
Other electronic version

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License
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Open access status
green
Persistent URL
https://folia.unifr.ch/unifr/documents/322664
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