Abstract
This article shows that multiple growth paths may occurin a politico-economic model of endogenous growth. This multiplicityis characterized by the coexistence of the low-tax, low-capital-flightequilibrium and a high-tax, high-capital-flight equilibrium.The likelihood of multiplicity is crucially related to the structureof power in society—namely, it is necessary that the politicallydecisive agents have a greater access to international capitalmarkets than the average in the economy.
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Paul, G.S., Verdier, T. Power, Distributive Conflicts, and Multiple Growth Paths. Journal of Economic Growth 2, 155–168 (1997). https://doi.org/10.1023/A:1009729117637
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DOI: https://doi.org/10.1023/A:1009729117637