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Culture and Market: A Macroeconomic Tale of Two Institutions

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  • Mausumi Das

    (Department of Economics, Delhi School of Economics)

  • Priyanka Arora

    (Delhi School of Economics)

Abstract

In this paper we model endogenous evolution of cultural traits which is mediated through market, and examine its impact on long run economic growth. Historically culture has played an important role in the process of economic development. Yet, economic development itself impacts upon the pre-existing cultural values and beliefs. We interact culture with market and show that such interaction may generate multiple growth trajectories depending on the initial distribution of cultural traits in the economy. In particular, an economy may end up in a culture-induced low growth trap in the long run. We also show that over time, with economic development, culture takes a back seat but its initial influence continues to impact long run outcomes.

Suggested Citation

  • Mausumi Das & Priyanka Arora, 2020. "Culture and Market: A Macroeconomic Tale of Two Institutions," Working papers 307, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:307
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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