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Product-based cultural change: Is the village global?

  • Maystre, Nicolas
  • Olivier, Jacques
  • Thoenig, Mathias
  • Verdier, Thierry

We provide a model of product-based cultural change where trade integration leads to cultural convergence. A standard trade model of Dixit–Stiglitz monopolistic competition is coupled with a micro-founded model of cultural dynamics. We show that access to varieties that are attached to a global cultural type changes the incentives of parents to socialize their children and transmit their type. The resulting increase in agents of the global cultural type leads to a magnification of the initial shock. A striking feature of the model is that even temporary shocks to openness may have permanent effects through the changing distribution of preferences in the economy.

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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 92 (2014)
Issue (Month): 2 ()
Pages: 212-230

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Handle: RePEc:eee:inecon:v:92:y:2014:i:2:p:212-230
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