Production risk and the functional distribution of income in a developing economy: tradeoffs and policy responses

• 成果类型: Article
• 署名作者: García-Peñalosa, C; Turnovsky, SJ
• 署名单位: University of Washington; University of Washington Seattle; Centre National de la Recherche Scientifique (CNRS)
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2003.10.004
• 发表日期: 2005
• 页码: 175-208
• 关键词: production risk; factor distribution of income; Stochastic growth

摘要

We develop a stochastic endogenous growth model to examine the relationship between the volatility of growth and the factor distribution of income. Our framework incorporates two important features of developing economies: the co-existence of a modern and a traditional sector and the fact that the income generated in the traditional sector can escape taxation. The relationship between volatility and factor distribution is complex, depending upon the source of risk and the elasticity of substitution between capital and labor in the formal sector. The policy options available to the government for counteracting changes in volatility are analyzed. The second best optimal tax structure is also characterized. (C) 2004 Elsevier B.V. All rights reserved.