The Political Economy of Wealth and Interest  

Oleh:

Schils, Rudiger ; Gruner, Hans Peter

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 117 no. 523 (Oct. 2007), page 1403-1422.
Topik: political economy; political economy; wealth; interest
Fulltext: 1403.pdf (191.92KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.26 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We study the relationship between wealth redistribution and the allocation of firm - ownership. The economy's wealth distribution affects the equilibrium interest rate and the allocation of entrepreneurial rents when wealth determines agents' ability to borrow. This leads to an unconventional voting behaviour of the politically decisive middle class : the political preferences of middle and upper class voters coincide when redistribution only has an adverse interest - rate effect. Middle class voters vote with the lower class if redistribution gives access to entrepreneurial rents. Technology may strongly affect political outcomes. Greater inequality amplifies the interest - rate effect and may lead to less redistribution.

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