1. RENT-SEEKING AND CAPITAL ACCUMULATION.
- Author
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BARELLI, PAULO and PESSÔA, SAMUEL DE ABREU
- Subjects
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RENT seeking , *SAVINGS , *NEOCLASSICAL school of economics , *INDUSTRIAL productivity ,DEVELOPING countries - Abstract
A general model incorporating rent-seeking activities in the standard neoclassical model of capital accumulation is presented. The welfare of the representative agent is negatively affected by the efficiency of rent-seeking activities. Although intuitive, this result is not obvious because long-run income can be positively affected by more efficient rent-seeking activities. The model is used to provide explanations for some recent experiences in developing countries, including the relative poor performance of economies that experience a move to a more decentralized system and the observed path of total factor productivity (TFP) in countries like Ireland and Venezuela. ( JEL D23, D74, O40, O41, O47) [ABSTRACT FROM AUTHOR]
- Published
- 2012
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