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Growth and distribution endogenously determined: a theoretical model and empirical evidence

Author

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  • Hernán Borrero
  • Nestor Garza

Abstract

We build upon an already known but scarcely developed feature of growth theory: the importance of asset distribution in an aggregate production function. We elaborate on a simple model of two individuals, and then generalize its deductions to an extended model of n agents, concluding that perfectly distributed productive capital leads to positive and optimum long-run “endogenous” growth. Recent and classical empirical literature on the topic suggests this interpretation. In addition, we find exploratory panel data evidence that supports our theory of growth and distribution in a set of Latin-American countries. JEL Classification: O10; O41; O54.

Suggested Citation

  • Hernán Borrero & Nestor Garza, 2019. "Growth and distribution endogenously determined: a theoretical model and empirical evidence," Brazilian Journal of Political Economy, Center of Political Economy, vol. 39(2), pages 344-361.
    • Handle: RePEc:ekm:repojs:v:39:y:2019:i:2:p:344-361:id:40
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    File URL: https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/40/35
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    Citations

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    Cited by:

    1. Tuo Shi & Yuanman Hu & Miao Liu & Chunlin Li & Chuyi Zhang & Chong Liu, 2020. "How Do Economic Growth, Urbanization, and Industrialization Affect Fine Particulate Matter Concentrations? An Assessment in Liaoning Province, China," IJERPH, MDPI, vol. 17(15), pages 1-14, July.
    2. Cher Chen & GholamReza Zandi Pour & Edwin R. de los Reyes, 2020. "Financial Development and Economic Growth in Asian Countries: A Panel Empirical Investigation," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 6(2), pages 76-84.

    More about this item

    Keywords

    Growth; asset distribution; inequality; Latin America; production function;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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