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Social Capital As An Engine Of Growth: Multisectoral Modeling And Implications

Author

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  • Bofota, Youyou Baende
  • Boucekkine, Raouf
  • Bala, Alain Pholo

Abstract

We propose an endogenous growth model incorporating social capital. Social capital serves only as an input in the production of human capital and it involves a cost in terms of the final good. In contrast to alternative specifications, this model ensures that social capital enhances productivity gains by playing the role of a timing belt that drives the transmission and propagation of all productivity shocks. We find that, depending on the measure of social capital, the elasticity of human capital with respect to social capital varies from 6% to 10%. Finally, we investigate the short-term dynamics and imbalance effect properties of the model, depending on the value of this elasticity. In particular, we show that when the substitutability of social capital for human capital increases, the economy is better equipped to surmount initial imbalances, as individuals may allocate more working time to the final good sector without impeding economic growth.

Suggested Citation

  • Bofota, Youyou Baende & Boucekkine, Raouf & Bala, Alain Pholo, 2016. "Social Capital As An Engine Of Growth: Multisectoral Modeling And Implications," Macroeconomic Dynamics, Cambridge University Press, vol. 20(8), pages 2093-2122, December.
    • Handle: RePEc:cup:macdyn:v:20:y:2016:i:08:p:2093-2122_00
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    Cited by:

    1. Alonso-Carrera, Jaime & Bouché, Stéphane & de Miguel, Carlos, 2021. "Revisiting the process of aggregate growth recovery after a capital destruction," Journal of Macroeconomics, Elsevier, vol. 68(C).
    2. Wei-Bin Zhang, 2021. "Economic Growth And Human Networking," Business & Management Compass, University of Economics Varna, issue 1, pages 5-25.
    3. Agénor, Pierre-Richard & Dinh, Hinh T., 2015. "Social capital, product imitation and growth with learning externalities," Journal of Development Economics, Elsevier, vol. 114(C), pages 41-54.
    4. Barış Alpaslan & Julide Yildirim, 2020. "The Missing Link: Are Individuals with More Social Capital in Better Health? Evidence from India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(3), pages 811-834, August.
    5. Coppier, Raffaella & Sabatini, Fabio & Sodini, Mauro, 2021. "Social Capital, Human Capital, And Fertility," Macroeconomic Dynamics, Cambridge University Press, vol. 25(3), pages 632-650, April.
    6. Ren, Zhiyuan & Zhu, Yuhan & Jin, Canyang & Xu, Aiting, 2023. "Social capital and energy poverty: Empirical evidence from China," Energy, Elsevier, vol. 267(C).
    7. Weibin Zhang, 2020. "Social Capital, Endogenous Labor Supply, and Economic Development," Asian Journal of Social Sciences and Management Studies, Asian Online Journal Publishing Group, vol. 7(1), pages 25-33.
    8. Barış Alpaslan, 2017. "Are Human and Social Capital Linked? Evidence from India," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 859-881, November.

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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