Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis

This paper analyzes the interplay of growth, (re-)distribution and poli-cies when the latter are set exogenously or when the latter depend on economically important fundamentals. A redistribution policy gen-erally causes lower growth, but less so when there is technological progress. The model implies that high (endogenous) tax rates may not necessarily imply low growth. The paper shows that the long-run cross-country relationship between growth and endogenous policy is generally not clear-cut. But this relies on conditions that can be used for identification in empirical research. The paper also argues that workers benefit more from technical progress than capital own-ers, even though inequality might and growth would rise