Document Type

Project

Publication Date

Summer 2005

Keywords

Wealth redistribution, Economic growth

Abstract

It is known that redistributing wealth from the rich to the poor tends to increase consumption in an economy. This is because when people’s incomes are lower they typically spend a larger percent of that income. This increase in consumption, however, must be accompanied by an equivalent decrease in savings, if savings equals investment. And if investment is the mechanism by which an economy grows, this must therefore have an effect on the growth of that economy. This paper deals strictly with the effects on long-term economic growth brought about by a change in income distribution. The purpose of this work is to examine some of the often overlooked long term effects that an increase in spending of this type could have on the economy. In particular, the adverse effect on the growth rate of capital (and thereby output) and the danger of an economy approaching a steady state with zero output.

Department

Economics

Subjects - Topical (LCSH)

Income distribution; Economic development

Genre/Form

student projects; term papers

Type

Text

Rights

Copying of this document in whole or in part is allowable only for scholarly purposes. It is understood, however, that any copying or publication of this document for commercial purposes, or for financial gain, shall not be allowed without the author’s written permission.

Rights Statement

http://rightsstatements.org/vocab/InC/1.0/

Language

English

Format

application/pdf

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Included in

Economics Commons

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