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Document Type

Campus-Only Access for Five (5) Years

Degree Name

Doctor of Philosophy (PhD)

Degree Program

Economics

Year Degree Awarded

2016

Month Degree Awarded

September

First Advisor

Peter Skott

Second Advisor

Michael Ash

Third Advisor

Donald Tomaskovic-Devey

Subject Categories

Economic Theory | Income Distribution | Macroeconomics | Political Economy

Abstract

Chapter 1 of this dissertation focuses on the political economy of rent seeking. Using trading in financial markets, patent litigation and managerial privilege as descriptive examples from the modern economy, it identifies situations where rent seeking opportunities occur. The challenge of correctly distinguishing between productive activities and rent seeking activities demonstrate the empirical challenges of examining rent seeking. This chapter also suggests that in addition to the opportunity cost of physical capital, modern rent seeking has a significant opportunity cost in the form of the misallocation of human capital.

Chapter 2 explores the relationship between increased rent seeking, aggregate demand, and economic growth. A mature economy Post-Keynesian model is developed to include the existence of economic rents. Two cases are explored. The first assumes a fixed markup and a flexible rate of capacity utilization along the balanced growth path. The second allows for a flexible markup and a fixed rate of capacity utilization. In both cases, the existence of rent seeking has negative effects on the long-run rate of low-skill employment and negative level effects through the redistribution of high-skill workers.

Using IPEDS data on degree completions by field of study for the 48 contiguous states from 1990-2010, chapter 3 uses the composition of postsecondary degree completions by major field of study as an indicator of the degree of rent seeking. Increases in the level of rent seeking are shown to have negative effects on the growth rate of real personal income per capita. A stylized growth model shows how rent seeking regimes can explain the empirical results.

Available for download on Friday, September 01, 2017

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