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Charity, The Spirit of Capitalism and Wealth Accumulation


  • Heng-fu Zou

    (Wuhan University
    The World Bank)


This paper studies charity contributions and wealth accumulation by extending the capitalist-spirit model to consider the social-status implications of charity and wealth in Becker (1974a, 1974b, 1976), Cole, Mailath and Postlewaite (1992), and Fershtman and Weiss (1993). In this new model, a representative agent derives utility from both consumption and social status, with the latter determined by his wealth and charity donation. This dynamic, general equilibrium framework enables us not only to re-examine many issues such as tax policy and charity contributions (Clotfelter, 1985), and the crowding-out effect of government support (Kingma, 1989), but also to study the dynamics of charity donation and wealth accumulation. Above all, I intend to answer the following question: if a society tends to be more altruistic, or if the social status is determined more by charity contributions than by wealth, will capital accumulation be reduced and charity donation be increased in the long-run?

Suggested Citation

  • Heng-fu Zou, 2001. "Charity, The Spirit of Capitalism and Wealth Accumulation," Annals of Economics and Finance, Society for AEF, vol. 2(2), pages 519-535, November.
  • Handle: RePEc:cuf:journl:y:2001:v:2:i:2:p:519-535

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    References listed on IDEAS

    1. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-148, February.
    2. Becker, Gary S, 1976. "Altruism, Egoism, and Genetic Fitness: Economics and Sociobiology," Journal of Economic Literature, American Economic Association, vol. 14(3), pages 817-826, September.
    3. Fershtman, Chaim & Weiss, Yoram, 1993. "Social Status, Culture and Economic Performance," Economic Journal, Royal Economic Society, vol. 103(419), pages 946-959, July.
    4. Clotfelter, Charles T., 1985. "Federal Tax Policy and Charitable Giving," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226110486.
    5. Reece, William S, 1979. "Charitable Contributions: New Evidence on Household Behavior," American Economic Review, American Economic Association, vol. 69(1), pages 142-151, March.
    6. Charles T. Clotfelter, 1985. "Federal Tax Policy and Charitable Giving," NBER Books, National Bureau of Economic Research, Inc, number clot85-1, January.
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