Turk, Z., Groom, B. and Fenichel, E. (2020) Working paper
Abstract: We contribute to the Solow-Swan strain of economic growth literature by integrating national distributional aspects into a dynamic model of economic growth. We show that country specific optimal growth policies balance distributional “preferences” against savings propensities of different percentiles of the emerging income distribution. We then present international comparisons of growth decomposition into distributional statistics and propose new measures of economic performance. Historical economic performance reveals
heterogeneous patterns of inequality increasing (e.g. US, UK, Germany, China) and decreasing (e.g. Ireland, France, Netherlands, Vietnam) economic growth around the world. These comparisons reveal the implicit efficiency-equity tradeoffs in each country’s set of national economic growth and social policies.
