Discussion Paper Details

Please find the details for DP2001 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Voracity and Growth

Author(s): Philip R. Lane and Aaron Tornell

Publication Date: October 1998

Keyword(s): Differential Games, Economic Growth, Natural Resources, Terms of Trade and voracity

Programme Area(s): International Macroeconomics

Abstract: We analyse an economy that lacks a strong legal-political institutional infrastructure and is populated by multiple powerful groups. Powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock. In equilibrium, this leads to slow economic growth and a 'voracity effect', by which a shock, such as a terms of trade windfall, perversely generates a more than proportionate increase in fiscal redistribution and reduces growth. We also show that a dilution in the concentration of power leads to faster growth and a less pro-cyclical response to shocks.

For full details and related downloads, please visit:

Bibliographic Reference

Lane, P and Tornell, A. 1998. 'Voracity and Growth'. London, Centre for Economic Policy Research.