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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - The distributional consequences of rent seeking
AU - Angelopoulos, Angelos
AU - Angelopoulos, Konstantinos
AU - Lazarakis, Spyridon
AU - Philippopoulos, Apostolis
PY - 2021/10/31
Y1 - 2021/10/31
N2 - We analyse the distributional effects of rent seeking via the financial sector in a model calibrated to US data. Rent seeking implies a misallocation of resources that increases wealth inequality among non rent seekers and for the whole economy. A deterioration in institutional quality implying more rent seeking leads to welfare losses for non rent seekers, especially for those with higher earnings and initial wealth, because they are most affected by the deterioration of the aggregate economy. On the other hand, welfare gains are larger for rent seekers with higher earnings and wealth, who have an increased resource extraction capacity.
AB - We analyse the distributional effects of rent seeking via the financial sector in a model calibrated to US data. Rent seeking implies a misallocation of resources that increases wealth inequality among non rent seekers and for the whole economy. A deterioration in institutional quality implying more rent seeking leads to welfare losses for non rent seekers, especially for those with higher earnings and initial wealth, because they are most affected by the deterioration of the aggregate economy. On the other hand, welfare gains are larger for rent seekers with higher earnings and wealth, who have an increased resource extraction capacity.
KW - wealth distribution
KW - rent seeking
KW - conditional welfare changes
U2 - 10.1111/ecin.13009
DO - 10.1111/ecin.13009
M3 - Journal article
VL - 59
SP - 1616
EP - 1640
JO - Economic Inquiry
JF - Economic Inquiry
SN - 0095-2583
IS - 4
ER -