Social Capital, Product Imitation and Growth with Learning Externalities

42 Pages Posted: 20 Apr 2016

See all articles by Pierre-Richard Agenor

Pierre-Richard Agenor

University of Manchester - School of Social Sciences

Hinh T. Dinh

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Date Written: September 1, 2013

Abstract

Links between social capital, human capital, and product imitation are studied in an overlapping generations model of endogenous growth where the key benefit of social capital is to promote imitation. There is also a two-way interaction between imitation and human capital. Building social capital (which brings direct utility) requires time. Because life expectancy is endogenously related to human capital, time allocation between market work and social capital accumulation is also endogenously determined. Social capital accumulation depends also on access to infrastructure. The model is calibrated numerically for a low-income country. A policy that helps to promote social capital accumulation may be very effective to foster economic growth, even if it involves offsetting cuts in other productive components of government spending, such as education outlays or infrastructure investment. Offsetting cuts in infrastructure investment, however, may be less effective.

Keywords: Political Economy, Economic Theory & Research, Debt Markets, Social Capital, Emerging Markets

Suggested Citation

Agenor, Pierre-Richard and Dinh, Hinh T., Social Capital, Product Imitation and Growth with Learning Externalities (September 1, 2013). World Bank Policy Research Working Paper No. 6607. Available at SSRN: https://ssrn.com/abstract=2327363

Pierre-Richard Agenor (Contact Author)

University of Manchester - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Hinh T. Dinh

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