Interdependent Preferences, Obstruction and Growth

Abstract:     
A model is proposed to examine the relationship between interdependence of preferences and economic performance in the presence of an obstruction technology. In such a context the growth rate of the economy is found to depend on the relative effectiveness of the available obstruction and production technologies. Interdependence appears both as a motive to engage in harmful activities and as a force that can benefit economic growth. The parameters that determine the effectiveness of the available technologies describe the institutions that protect property and productive efforts. Both the assumptions made and the results obtained are compatible with the empirical findings of an extended literature.

Number of Pages in PDF File: 31

Keywords: Interdependent Preferences, Obstruction, Growth, Institutional Framework

JEL Classification: O17, O40, O49

working papers series