AEAweb: Journal Article Full-Text Access
Note to Institutional Subscribers: If you normally access AEAweb journal content via your university or firm's subscription and receive this page, please click
here. The most likely causes of this are a recently changed IP address, a new subscription, or the renewal of a lapsed institutional subscription. This page will stop appearing on the next synchronisation of the document delivery and authentication systems.
You may also click here for pay-per-view, Athens login and other access options .
AEA Members, please click the button below to access the login form:
Azzimonti, Marina. 2011. "Barriers to Investment in Polarized Societies."
,
101(5): 2182-2204.
Show Article Details
DOI: 10.1257/aer.101.5.2182
Abstract:I present a tractable dynamic model of political economy where disagreements about the composition of public spending result in implementation of short-sighted policies. Excessive taxation reduces the return to physical capital and hence investment rates,
which slows down growth along the transition. In the long run, output, consumption and welfare are inefficiently low. The larger is the degree of polarization, the greater is the inefficiency. Political stability mitigates the effects of polarization by making the incumbent internalize the dynamic inefficiencies introduced by the choice of growth-retarding policies.
JEL: D72, E22, E23, E62, H25, O16, O17
Authors:
Azzimonti, Marina (U TX)
JEL Classifications:
D72: Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
E22: Capital; Investment; Capacity
E23: Macroeconomics: Production
E62: Fiscal Policy
H25: Business Taxes and Subsidies including sales and value-added (VAT)
O16: Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
O17: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
If you are an AEA member and do not have an AEAweb login, please
click here.
If you would like to become an AEA member, please see our
membership page.
If you arrived at this page via a journal article link, you will be redirected to the pdf after successful login.
If your first login attempt fails, and you have recently signed up for access or have recently changed your password, you may need to wait a few moments and try again.
Please contact us at
notify@aeaweb.org with any problems or questions.
Contents of Current Issues
June 2013 AER
Spring 2013 JEP
May 2013 AEJ: Policy
May 2013 AEJ: Micro
April 2013 AEJ: Macro
April 2013 AEJ: Applied
March 2013 JEL
Virtual Field Journals
In the News:
An article in the Journal of Economic Perspectives entitled, "The Growth of Finance" by Harvard Business School professors, Robin Greenwood and David Scharfstein, was recently explored by the New York Times and the Wall Street Journal.
U.S. News & World Report cites Princeton-based Burton Malkiel's article in the Journal of Economic Perspectives as a preferred source of "sound financial advice" for investors.
The Huffington Post reports on a study addressing the influence of lifestyle factors on shrinking height in the elderly published in the April issue of AEJ: Applied Economics.
AEA in News Archive
Contact Us
