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Sclerosis, Convergence, and Taxes: Determinants of Growth among the US States

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  • D W Rasmussen
  • T W Zuehlke

Abstract

Three theories of economic growth are investigated using data for the US states. They are the ‘sclerosis' theory that redistributive coalitions slow growth, the ‘convergence’ theory which predicts faster growth in low-income economies, and the ‘supply-side’ theory emphasizing the disincentive effects of taxation. Simultaneous testing of these theories requires the use of a pooled cross-section time-series model which allows temporal variation in measures of income growth, sclerosis, and taxes. Each theory has some empirical support for the period 1961–84.

Suggested Citation

  • D W Rasmussen & T W Zuehlke, 1990. "Sclerosis, Convergence, and Taxes: Determinants of Growth among the US States," Environment and Planning C, , vol. 8(1), pages 1-11, March.
    • Handle: RePEc:sae:envirc:v:8:y:1990:i:1:p:1-11
    DOI: 10.1068/c080001
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    1. Sahling, Leonard G & Smith, Sharon P, 1983. "Regional Wage Differentials: Has the South Risen Again?," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 131-135, February.
    2. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    3. Benson, Bruce L & Johnson, Ronald N, 1986. "The Lagged Impact of State and Local Taxes on Economic Activity and Political Behavior," Economic Inquiry, Western Economic Association International, vol. 24(3), pages 389-401, July.
    4. Ram, Rati, 1986. "Government Size and Economic Growth: A New Framework and Some Evidencefrom Cross-Section and Time-Series Data," American Economic Review, American Economic Association, vol. 76(1), pages 191-203, March.
    5. Clark Nardinelli & Myles Wallace & John Warner, 1987. "Explaining differences in state growth: Catching up versus Olson," Public Choice, Springer, vol. 52(3), pages 201-213, January.
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    Cited by:

    1. David W. Rasmussen, 1990. "Economic Development as an Empirical Concept," The Review of Regional Studies, Southern Regional Science Association, vol. 20(1), pages 56-61, Winter.
    2. David W. Rasmussen, 1990. "Drugs, Tsars and Economic Development," The Review of Regional Studies, Southern Regional Science Association, vol. 20(3), pages 1-3, Fall.

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