Social Cohesion and Optimal Redistribution in Economies with Long-Run Growth

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Show simple item record Bandyopadhyay, Debasis en Tang, X en 2020-04-15T00:47:02Z en 2018 en
dc.identifier.uri en
dc.description.abstract We suggest that as social cohesion improves, the macroeconomic gains from progressive redistribution decline. Social interactions facilitate diffusion of nonrival knowledge. The consequent bridging of the knowledge gaps makes learning cheaper for children with limited access to adults with high human capital and thereby lowers the optimal progressivity for a redistributive policy. If social cohesion exceeds a critical threshold then zero progressivity would be optimal. Numerically, a country with greater social cohesion finds smaller gains in growth, efficiency, and welfare from progressive redistribution over and above the gains from a Pigouvian subsidy that eliminates the inefficiency caused by knowledge externalities. en
dc.publisher American University of Sharjah en
dc.relation.ispartofseries School of Business Administration Working Paper Series en
dc.rights Items in ResearchSpace are protected by copyright, with all rights reserved, unless otherwise indicated. Previously published items are made available in accordance with the copyright policy of the publisher. en
dc.rights.uri en
dc.title Social Cohesion and Optimal Redistribution in Economies with Long-Run Growth en
dc.type Report en
dc.rights.holder Copyright: The author en en
dc.rights.accessrights en
pubs.subtype Working Paper en
pubs.elements-id 773662 en Business and Economics en Economics en
pubs.number SBAWPS: 01-02/2018 en
pubs.record-created-at-source-date 2019-06-04 en

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