A Note on Optimal Income Redistribution in a Creative Region

Batabyal, Amitrajeet (2017): A Note on Optimal Income Redistribution in a Creative Region.

Abstract

We study optimal income redistribution in a region that is creative in the sense of Richard Florida and thereby extend aspects of the recent analysis in Batabyal and Beladi (2017). Using the terminology of these researchers, members of the creative class are either artists or engineers. This bipartite grouping stems from the manner in which creative capital is acquired by the artists and the engineers. Specifically, we show that when the savings rates of the artists and the engineers comprising the creative class satisfy a particular inequality, it is possible for a regional authority (RA) to uniquely redistribute income between these two groups in a way that achieves the so called “golden rule” stock of physical capital.

• Item Type: MPRA Paper
• Language: English
• Keywords: Creative Capital, Creative Class, Golden Rule, Income Redistribution, Region
• Subjects: D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

References

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Batabyal, A.A., and Beladi, H. 2017. Artists, Engineers, and Aspects of Economic Growth in a Creative Region, Munich Personal RePEc Archive (MPRA) Paper No. 79573.

Florida, R. 2002. The Rise of the Creative Class. Basic Books, New York, NY.

Florida, R. 2005. The Flight of the Creative Class. Harper Business, New York, NY.

Marlet, G., and Van Woerkens, C. 2007. The Dutch creative class and how it fosters urban employment growth, Urban Studies, 44, 608-630.