Immiserizing Growth in a Closed Economy

22 Pages Posted: 19 Nov 2003

See all articles by Kala Krishna

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Cemile Sahin

affiliation not provided to SSRN

Multiple version iconThere are 3 versions of this paper

Date Written: October 22, 2003

Abstract

This paper develops a model with three key features: a factor market distortion, monopoly power in the product market, and indivisibilities in consumption. We show that in this setting, there are multiple equilibria: one with high and the other with low equilibrium wages, incomes and output. Also that even in a closed economy, growth may be immiserizing. Finally, that redistribution could be a "rich man's game."

Keywords: Multiple equilibria, immiserizing growth, factor market distortions, indivisibilities in consumption, income distribution

JEL Classification: H23, O33

Suggested Citation

Krishna, Kala and Sahin, Cemile, Immiserizing Growth in a Closed Economy (October 22, 2003). Available at SSRN: https://ssrn.com/abstract=458460 or http://dx.doi.org/10.2139/ssrn.458460

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

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Cemile Sahin

affiliation not provided to SSRN

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