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An Endogenous Growth Model with Human and Social Capital Interactions

  • Tiago Neves Sequeira
  • Alexandra Ferreira-Lopes

Social capital has recently been introduced in the economic literature as a source of economic growth. In this paper we study the interactions between social and human capital, and their contributions to economic growth in an endogenous growth model. The model indicates an increase in the relative importance of human capital when compared to social capital throughout the development process of the economy, as also described in some of the empirical literature on the topic. We derive theoretical and policy implications from our endogenous growth model, concluding that a subsidy for human capital has important implications for economic growth and allocation redistribution. A subsidy to social capital is not relevant for economic growth. Its only effect would be the increase in the social to human capital ratio of the economy.

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File URL: http://hdl.handle.net/10.1080/00346764.2011.592330
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Article provided by Taylor & Francis Journals in its journal Review of Social Economy.

Volume (Year): 69 (2011)
Issue (Month): 4 (December)
Pages: 465-493

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Handle: RePEc:taf:rsocec:v:69:y:2011:i:4:p:465-493
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  1. Niclas Berggren & Mikael Elinder & Henrik Jordahl, 2008. "Trust and growth: a shaky relationship," Empirical Economics, Springer, vol. 35(2), pages 251-274, September.
  2. Robert Tamura, 2002. "Human capital and economic development," Working Paper 2002-5, Federal Reserve Bank of Atlanta.
  3. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2004. "Trust and economic growth: a robustness analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 118-134, January.
  4. Bartolini, Stefano & Bonatti, Luigi, 2007. "Endogenous growth, decline in social capital and expansion of market activities," MPRA Paper 3341, University Library of Munich, Germany.
  5. Alberto Bisin & Danilo Guaitoli, . "Social Capital, Modernization and Growth," UFAE and IAE Working Papers 545.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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