Chakraborty, Shankha

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https://hdl.handle.net/1794/3687

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Browsing Chakraborty, Shankha by Subject "Income distribution"

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    Bank-based versus Market-based Financial Systems: A Growth-theoretic Analysis
    (University of Oregon, Dept. of Economics, 2003-02-01) Chakraborty, Shankha; Ray, Tridip
    We study bank-based and market-based financial systems in an endogenous growth model. Lending to firms is fraught with moral hazard as owner-managers may reduce investment profitability to enjoy private benefits. Bank monitoring partially resolves the agency problem, while market-finance is more ‘hands-off’. A bank-based or market-based system emerges from firm financing choices. It is not possible to say unequivocally which of the two systems is better for growth. The growth rate depends, crucially, on the efficiency of financial and legal institutions. But a bank-based system outperforms a market-based one along other dimensions. Investment and per capita income are higher, and income inequality lower, under a bank-based system. Bank-based systems are more conducive for broad-based industrialization. A temporary income redistribution, under both financial systems, results in permanent improvement in per capita income as well as income distribution.
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    Mortality, Human Capital and Persistent Inequality
    (University of Oregon, Dept. of Economics, 2003-03-20) Chakraborty, Shankha; Das, Mausumi
    Available evidence suggests high intergenerational correlation of economic status, and persistent disparities in health status between the rich and the poor. This paper proposes a novel mechanism linking the two. We introduce health human capital into a two-period overlapping generations model. Private health investment improves the probability of surviving from the first period of life to the next and, along with education, enhances an individual’s labor productivity. Poorer parents are of poor health, unable to invest much in reducing mortality risk and improving their human capital. Consequently, they leave less for their progeny. Despite convex preferences, technology and complete markets, initial differences in economic and health status may perpetuate across generations.