Optimal policies, middle class development and human capital accumulation under elite rivalry

Autor:	Pedro Neves, Elena Sochirca
Rok vydání:	2020
Předmět:	Labour economics 050208 finance Middle class Yield (finance) media_common.quotation_subject 05 social sciences Public policy Human capital Incentive 0502 economics and business 8. Economic growth Elite Economics 050207 economics Optimal tax Rivalry media_common
Zdroj:	Eurasian Economic Review. 10:727-744
ISSN:	2147-429X 1309-422X
DOI:	10.1007/s40822-020-00150-5
Popis:	We build a dynamic model with endogenous middle class development, human capital accumulation, and policy choices, in order to analyze the interactions between the optimal policies implemented by the ruling elite and the key drivers of economic growth in the presence of elite rivalry. We consider that: (1) the specific policy choices depend on economic and political incentives of the elite; (2) the individuals’ decisions regarding their children’s education are endogenously determined by specific economic and political factors. Our results suggest that, contrarily to the economically motivated policies, the politically motivated policy choices imply inefficient economic outcomes and limit the development of the middle class and human capital accumulation. The results also show that higher middle class and human capital accumulation growth rates can lower the degree of elite rivalry by reducing the level of the optimal tax rate, increase public investments in education, and yield positive changes in all economic outcomes.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::1d10f19151bed7b9714d19dfc6a02946 https://doi.org/10.1007/s40822-020-00150-5 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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