Gall, Thomas and Masella, Paolo (2012) Markets and jungles. Journal of Economic Growth, 17 (2). pp. 103-141. ISSN 1381-4338
Full text not available from this repository.Abstract
Economic institutions determine prospects for growth and development. This paper examines necessary conditions for an economy to support institutions that implement markets. Agents differ in land holdings, skill, and power. A competitive market assigns land to the skilled, not necessarily to the powerful. Therefore a market allocation needs to be robust to coalitional expropriation. In a dynamic setting, market payoffs may induce sufficient inequality in next period’s endowments for markets to alternate with expropriation in a limit cycle, decreasing efficiency and amplifying macroeconomic fluctuations. Long run stability of markets is favored by higher social mobility, more initial equality, and less mismatch between skill and land.
Item Type: | Article |
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Schools and Departments: | University of Sussex Business School > Economics |
Subjects: | H Social Sciences |
Depositing User: | Paolo Masella |
Date Deposited: | 01 Nov 2012 10:35 |
Last Modified: | 01 Nov 2012 10:35 |
URI: | http://sro.sussex.ac.uk/id/eprint/41139 |