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Social values and economic dynamics

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  • Kim, Yong Jin
  • Lee, Chul-In

Abstract

Social values/belief systems can be viewed as a stock of non-productive ideas that are collectively shared in a non-rivalrous way and evolve through experience/participation at the aggregate social level. While they are separate from the stock of scientific ideas that are essential to production, history shows that social values and scientific ideas are interdependent. This paper explores the relationship between social values and long-run growth in an endogenous growth framework and highlights the underlying mechanism. We view both scientific ideas and social values as some sort of social capital that accumulates through a society׳s aggregate experience and also as goods that generate utility flows with “rational addiction” or “habit formation” at the social level when combined with individuals’ time investment (learning-by-doing). We demonstrate the mechanism through which social values affect long-run economic growth. In particular, (i) we derive the conditions under which either the economy grows with social values as in the usual modern economies or it is dominated by social values with economic distress; and (ii) finally we show the applicability of the model to some episodes.

Suggested Citation

  • Kim, Yong Jin & Lee, Chul-In, 2015. "Social values and economic dynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 69-84.
  • Handle: RePEc:eee:dyncon:v:53:y:2015:i:c:p:69-84
    DOI: 10.1016/j.jedc.2015.01.008
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    References listed on IDEAS

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    More about this item

    Keywords

    Social values; Science; Social capital; Endogenous growth;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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