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Property Rights and Growth

Author

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  • Holger Strulik
  • Ines Lindner

Abstract

The paper analyses the long-run equilibrium and adjustment dynamics in models of economic growth where property rights are absent. A comparison with the standard models assesses the importance of property rights quantitatively. In the neoclassical growth model individuals arrive at a lower steady-state level of consumption. The absolute convergence hypothesis does not longer hold. An augmented non--linear Ak economy is capable of long-run growth without institutional arrangements if this holds true for an otherwise identical economy with secure property rights. The lawless economy, however, approaches a lower long-run growth rate which is only up to about half of that of an economy with secure property rights. This is due to a lower investment rate despite identical long--run capital productivity. The model, therefore, can explains conditional convergence.

Suggested Citation

  • Holger Strulik & Ines Lindner, 1999. "Property Rights and Growth," Quantitative Macroeconomics Working Papers 19904, Hamburg University, Department of Economics.
    • Handle: RePEc:ham:qmwops:19904
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    References listed on IDEAS

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    Cited by:

    1. Mino, Kazuo, 2006. "Voracity vs. Scale Effect in a Growing Economy," MPRA Paper 16999, University Library of Munich, Germany.
    2. Tiago Sequeira, 2004. "Mortality Rate and Property Rights in a Model with Human Capital and R&D," Development and Comp Systems 0408010, University Library of Munich, Germany.
    3. Mino, Kazuo, 2006. "Voracity vs. scale effect in a growing economy without secure property rights," Economics Letters, Elsevier, vol. 93(2), pages 278-284, November.

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    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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