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The Evolution Of A Rentier Economy And The Suppression Of Economic Welfare

Author

Listed:
  • Savvakis C. Savvides

    (Visiting Lecturer, John Deutsch International Executive Programs, Queen's University, Canada)

Abstract

The paper highlights the importance of a fair distribution of wealth among the economic agents of a country so that the benefits of a free-market economy work efficiently and create new wealth that fosters economic welfare are at work and functioning efficiently. Extreme inequality and a dysfunctional banking system deprives the market economy from entrepreneurial skills and innovation. In addition, the risk aversion attitudes of the wealthy lead to an elusive pursuit of return without the risk, but which inevitably, through a dysfunctional banking system, results in the transfer of existing wealth from the many to the very few rather than creating new wealth. And the real economy is thereby trapped in a vicious circle which further exaggerates wealth concentration and inequality.

Suggested Citation

  • Savvakis C. Savvides, 2024. "The Evolution Of A Rentier Economy And The Suppression Of Economic Welfare," Development Discussion Papers 2024-06, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4619
    as

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    References listed on IDEAS

    as
    1. Savvakis C. Savvides, 2022. "The Disconnect of Funding From Wealth Creation," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 23(2), pages 143-176, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Economic development; wealth; inequality; risk analysis; project evaluation; corporate lending; credit risk.;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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