Diversity and Growth

37 Pages Posted: 26 Jun 2018

See all articles by Mark Gradstein

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); World Bank - Development Research Group (DECRG)

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Date Written: June 2018

Abstract

The diversity of social interaction within economic communities affects productivity and growth, and is itself shaped by economic conditions. These reciprocal effects raise the possibility of multiple equilibria, of setting a socially polarized economy stagnating in poverty on a new path of social integration and economic growth through external intervention or an internal political initiative. This paper describes a simple analytical model that captures these reciprocal effects, and sheds light on the role of government capacity, community leadership, federation and external credit or aid, in achieving economic growth through social integration.

Suggested Citation

Gradstein, Mark, Diversity and Growth (June 2018). CEPR Discussion Paper No. DP13011, Available at SSRN: https://ssrn.com/abstract=3202303

Mark Gradstein (Contact Author)

Ben-Gurion University of the Negev - Department of Economics ( email )

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