Cultural Constraints on Innovation-Based Growth

25 Pages Posted: 30 Mar 2014

See all articles by Mariko J. Klasing

Mariko J. Klasing

University of Groningen - Faculty of Economics and Business

Petros Milionis

University of Groningen - Faculty of Economics and Business

Date Written: August 1, 2013

Abstract

To what extent does the cultural composition of a society impose a constraint on its long-run growth potential? We study this question in the context of an innovation-based model of growth where cultural attitudes are endogenously transmitted from one generation to the next. Focusing on attitudes regarding patience, we analyze the two-way interaction between economic growth and the intergenerational transmission of patience. Exploiting this interaction, we compare the long-run growth performance of a culturally heterogeneous society where patience is initially underrepresented in the population with a culturally homogeneous society where all agents are perfectly patient. Our main result is that in the absence of any intrinsic preferences of patient parents to transmit their attitudes to their children, the development paths of the two societies are bound to diverge, with the culturally heterogeneous society experiencing lower growth rates. Yet, if patient parents ceteris paribus prefer their children to be patient like them, we show that the two societies can in the long run grow at the same rate.

Keywords: Innovation-Based Growth, Cultural Transmission, Patience, Comparative Development

JEL Classification: D91, E24, O30, O40, Z10

Suggested Citation

Klasing, Mariko J. and Milionis, Petros, Cultural Constraints on Innovation-Based Growth (August 1, 2013). Available at SSRN: https://ssrn.com/abstract=2417419 or http://dx.doi.org/10.2139/ssrn.2417419

Mariko J. Klasing (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Petros Milionis

University of Groningen - Faculty of Economics and Business ( email )

Nettelbosje 2
Groningen, Groningen 9700 AV
Netherlands

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
76
Abstract Views
5,739
Rank
565,334
PlumX Metrics