111 research outputs found
Transitional Dynamics in a Growth Model with Distributive Politics
No full textThis paper constructs a heterogenous agent model of endogenous distribution and growth. When the labor leisure choice of agents is exogenous, the factor holding ratios of households converges to a mass point that is independent of the initial distribution of capital in the steady state. There is complete equality and every household's preferred tax rate equals the growth maximizing tax rate. There is no distributive con.ict in the long run. When the labor leisure choice of households is endogenous, there is also complete convergence in the factor holding ratios of agents in the steady state. However, the tax rate under majority voting is less than the growth maximizing tax rate which leads to distributive con.ict in the long run. These results extend the model of endogenous distribution and growth in Das and Ghate (2004) in two ways. First, we assess the impact of redistributive politics on growth by looking at the e.ect of income inequality on the tax rate and labor supply. Second, the model is solved using a more empirically plausible speci.cation of the government budget constraint in which households vote over the tax rate on capital income instead of a tax on wealth. The general insight gained from the analysis is that characterizing the transitional dynamics in a model of redistributive politics and growth is not an intractable proposition.Distributive conflict; Endogenous distribution; Median voter theorem; Endogenous growth
Transitional dynamics in a growth model with distributive politics
No full textThis paper constructs a heterogenous agent model of endogenous distribution and growth. When the labor leisure choice of agents is exogenous, the factor holding ratios of households converges to a mass point that is independent of the initial distribution of capital in the steady state. There is complete equality and every household's preferred tax rate equals the growth maximizing tax rate. There is no distributive con.ict in the long run. When the labor leisure choice of households is endogenous, there is also complete convergence in the factor holding ratios of agents in the steady state. This implies that there is unanimity over preferred tax rates as in the previous case, although the preferred tax rate of households is less than the growth maximizing tax rate. We identify the intuition behind this result. Our results also extend the model of endogenous distribution and growth in Das and Ghate (2004) in two ways. First, we assess the impact of redistributive politics on growth by looking at the e.ect of income inequality on the tax rate and labor supply. Second, the model is solved using a more empirically plausible speci.cation of the government budget constraint in which households vote over the tax rate on capital income instead of a tax on wealth. The general insight gained from the analysis is that characterizing the transitional dynamics in a model of redistributive politics and growth is not an intractable proposition.Distributive Conflict, Endogenous Distribution, Median Voter Theorem, Endogenous growth
The Welfare State, Thresholds, and Economic Growth
No full textCan a growing welfare state induce a regime switch in the growth rate of an econ-omy? This paper constructs a dynamic political economy model of economic growth and the welfare state in which both variables are non-linearly related and jointly en-dogenous. Using a Markov switching framework over the period 1950-2001, we find that the structural decline in growth rates that several welfare state economies expe-rienced during 1970-1975 are preceded by movements to a high welfare state regime. This suggests that expanding welfare state regimes are associated with low economic growth regimes, while contracting welfare state regimes are associated with high growth regimes. However, we also find that the structural decline in growth rates leads to a downward structural break in the welfare state for many welfare state economies. This suggests that declining growth regimes are associated with contracting welfare state regimes, as lower growth forces politicians to cut the size of the welfare state. We also report strong evidence that both expansion and contractions in the welfare state affects growth non-linearly. These results are able to characterize a predictable and general pattern of welfare state-growth evolution.Welfare state; Structural change; Regime switching models; Positive political economy; Endogenous growth
V-Factor: Distribution, timing and correlates of the the great Indian growth turnaround
No full textThe ratio of Indian to US per capita output over the past 45 years has displayed a distinctive "V"-shaped pattern. We show that a strikingly similar V-shaped pattern is visible not just in aggregate output figures, but also as the primary determinant of long-term movements in the cross-sectional distribution within the All-India total, at both sectoral and state output levels. We also carry out preliminary investigations of correlates of the "VFactor", using a new panel data set for Indian states from 1960 to 2005 that extends and encompasses all previous datasets relevant to macroeconomic analysis of the Indian states.Principal Components, Convergence, Divergence, Indian states
The "V-Factor": Distribution, Timing and Correlates of the Great Indian Growth Turnaround
No full textThe ratio of Indian to US per capita output over the past 45 years has displayed a distinctive "V"-shaped pattern. We show that a strikingly similar V-shaped pattern is visible not just in aggregate output .figures, but also as the primary determinant of long-term movements in the cross-sectional distribution within the All-India total, at both sectoral and state output levels. We also carry out preliminary investigations of correlates of the "V-Factor", using a new panel data set for Indian states from 1960 to 2005 that extends and encompasses all previous datasets relevant to macroeconomic analysis of the Indian states.Principal components, divergence, Indian States
Transitional Dynamics in a Growth Model with Distributive Politics
No full textThis paper constructs a dynamic analysis of the growth and distribution models of Das and Ghate (2004) and Alesina and Rodrik (1994) when leisure is valued by agents. When leisure enters the utility function, we show that the tax rate on capital income chosen in a political equilibrium is lower than the growth maximizing tax rate. This slows growth down, but for a very different reason than in Alesina and Rodrik (1994). Here, unanimity holds, and slower growth comes together with valued leisure, while in AR, slower growth comes from conflicting choices over the tax rate, with a capital poor median voter prevailing. Our results generalize the work of Alesina and Rodrik (1994) and Das and Ghate (2004) in two ways. First, we assess the impact of redistributive politics on growth by looking at the effect of income inequality on the tax rate and labor supply. Second, using the set up of Das and Ghate (2004), we provide a dynamic analysis of Alesina and Rodrik (1994) where majority voting determines the extent of distribution, and thus, a relationship between inequality and growth. The general insight gained from the analysis is that characterizing the transitional dynamics in a model of redistributive politics and growth with endogenous leisure is not intractable.Distributive Conflict, Endogenous Distribution, Median Voter Theorem, Endogenous Growth, Positive Political Economy
Optimal Fiscal Policy in an Economy Facing Socio-Political Instability
No full textWe present a model of optimal government policy when policy choices may exacerbate socio-political instability (SPI). We show that optimal policy that takes into account SPI transforms a standard concave growth model into a model with both a poverty trap and endogenous growth. The resulting equilibrium dynamics inherit the properties of government policies and need not be monotone. Indeed, for a broad set of conditions we demonstrate that government policy is unable to eliminate the poverty trap; when these conditions do not hold, "most" countries eventually reach a balanced growth path. The predictions of the model are tested by developing three new measures of SPI for a panel of 58 countries. Estimating optimal policies and the growth equation derived from the model reveals strong support for the theory. In particular, we show via simulations that optimal funding for public investment and the police cause a typical developing economy to expand on a quasi-linear growth path, with the baseline level of SPI determining whether growth is positive or negative.Socio-Political Instability, Endogenous Growth, Public Investment, Political Economy of Growth
Megymenum distanti Kocorek & Ghate, 2012, new species
No full textMegymenum distanti, new species (Figs. 1–9) Diagnosis. The new species is similar to M. affine BOISDUVAL and M. brevicorne (FABRICIUS) in its body outline and sculpture; nevertheless, it can easily be separated from both of these species by the characters given in the Table 1. Description. Body dark brown with metallic tinge and light brown membrane, elongate, abdomen slightly broader than pronotum (Fig. 1). Head punctured; paraclypei deeply concave and much longer than clypeus; preocular part swollen with small sharp process in female; eyes rounded, protruding and pedunculate, light-brown, ocelli of the same color, interocellar distance 1,8–2,1; antennae 4 -segmented, 1 st segment short, not reaching apex of head, 2 nd long and broad, 3 rd flattened and broadened, 4 th spindle-shaped; rostrum same color as rest of body, reaching mid-coxae, its 1 st segment extending beyond base of head, bucculae lobed, buccular surface convex and rugose, almost of the same color as head. Pronotum generally of same color as head, with numerous fine ridges, and punctures on anterior border which is drawn forwards to form a small collar-like structure behind base of head, bearing small but sharp spines in female; antero-lateral margins rounded without processes, antero-median tuberosity large and conspicuous; lateral pronotal margins irregularly rugged with a single pointed projection; posterior pronotal angles broadly rounded; posterior pronotal margin straight at base of scutellum. tanti new species. Meso- and metasternum with a deep median groove; scent gland spout large and conspicuous, evaporatoria wrinkled. Scutellum with punctures dispersed over its entire surface; prominent cavity-like depressions at basal angles. Corium shorter than scutellum, membrane shorter than abdomen, cream-colored, with brownish patches. Legs uniformly colored, under-surface of femora with ten small spines (more or less distinct) arranged in two rows with distal spines progressively robust or strong, hind tibia of female slightly dilated. Abdominal sterna of same color as remaining parts of body, sparsely punctured; lateral parts of sterna uncovered by hemelytra, well conspicuous; each sternum laterally with small posteriorly directed apical projection and very small median lobe. Male genital capsule with median swollen process on its ventral rim; paramere with small and triangular growth; anterior part of ejaculatory reservoir strongly coiled. Female 9 th paratergite similar to that of M. affine and M. brevicorne, 1 st valvifers with distinct median elevation. Spermathecal bulb small, pumping region well defined, distal and proximal flanges distinct, spermathecal duct membranous, forming folding sack-like structure with minute spines, ring sclerite present. Measurements (in mm). Male: total body length 13.0; abdominal width 7.1; head length 2.3; head width 2.5; interocelar distance 1.8; antennal segments: I 0.7, II 1.6, III 1.3, IV 1.1; pronotal length 3.8; pronotal width 6.4; scutellum length 3.6; width 3.5. Female: total body length 13.9; abdominal width 8.9; head length 2.4; head width 2.7; interocelar distance 2.1; antennal segments: I 0.8, II 1.7, III 1.4, IV 1.1; pronotal length 4.0; pronotal width 7.0; scutellum length 3.9; width 3.9. Type material. Holotype male: India, Pune, August 2010, coll. H.V. Ghate & Sanket Tembe, preserved in the collection of University of Opole at Department of Biosystematics; Paratype female: India, Pune, August 2010, coll. H.V. Ghate & Sanket Tembe, preserved in the collection of Modern College, Pune; an additional pair of male and female paratypes, coll H.V. Ghate (September 2010, same locality), also preserved in the collection of Modern College. Etymology. The species name is dedicated to W.L. Distant, the eminent British entomologist and the author of the Hemiptera volumes in the monumental Fauna of British India series, as well as for many other papers on Hemiptera. Notes on biology. The new species was collected from Pune in August-September 2010 as adults (Fig. 2) and as instars (Fig. 3) on the host plant Diplocyclos palmatus (Cucurbitaceae) (Fig. 4). This climber grows at several places along the roadside on the campus of the University of Pune. The adults as well as nymphs were found to feed exclusively on tender shoots. Mating pairs as well as all stages of nymphs also fed on the same plant, and not on other plants that grow profusely near the side of its host plant. Neither nymphs nor adults smell strongly or release copious secretions when handled.Published as part of Kocorek, Anna & Ghate, Hemant, 2012, Megymenum distanti, a new remarkable species of the Dinidoridae subfamily Megymeninae (Hemiptera: Heteroptera: Dinidoridae) from India, pp. 31-39 in Zootaxa 3218 on pages 31-35, DOI: 10.5281/zenodo.21083
Correlates of statewise participation in the great Indian growth turnaround: some preliminary robustness results
No full textThis short note provides some supplementary analysis to the regressions in Section 5 of Ghate and Wright (forthcoming), that was carried out after the refereeing process for that paper was completed, and hence could not be included in the published version. It is not a free-standing paper, but is intended to be read in conjunction with the published paper.
Voting, Wealth Heterogeneity, and Endogenous Labor Supply
No full textWe examine the link between voting outcomes, wealth heterogeneity, and endogenous labor - leisure choice in the majority-voting - endogenous-growth frameworks of Alesina and Rodrik (1994) and Das and Ghate (2004). We augment these frameworks to incorporate leisure-dependent utility and allow households to vote on factor-specific income taxes. When agents vote on factor-specific taxes, we show that the asymptotic convergence of factor holdings does not imply unanimity over the growth-maximizing tax policy in the steady state. Unanimity over growth-maximizing policies holds only when agents vote on a general income tax,and when agents vote on factor-specific taxes but labor is exogenous.factor income taxation, endogenous distribution, median-voter theorem, heterogeneous agents, endogenous labor supply
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