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Productivity, Social Interaction and Communication

  • Gilles SAINT-PAUL

    (IDEI, Université des Sciences Sociales de Toulouse)

In this paper, we study how, depending on the sociological and technological characteristics of the economy, a "unified" or, on the contrary, a stratified way of communicating may émerge. Communication takes place less efficiently in the stratified case, because people who spend différent languages cannot communicate with each other. The main results of the paper are as follows. First, the equilibrium degree of literacy is suboptimally low because of the "thin market externality" associated with the language. Second, social stratification generates linguistic stratification and the associated output and welfare losses due to communication failure. Third, because of the thin market externality, there is too much stratification. Fourth, specialized technologies are less vulnerable to stratification than flexible ones, or, equivalently, increased fiexibility may have adverse effects on output when society is stratified.

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File URL: http://sites.uclouvain.be/econ/DP/REL/2002022.pdf
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Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2002022.

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Length: 14
Date of creation: 01 Jun 2002
Date of revision:
Handle: RePEc:ctl:louvre:2002022
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  1. Blume, Andreas, 2000. "Coordination and Learning with a Partial Language," Journal of Economic Theory, Elsevier, vol. 95(1), pages 1-36, November.
  2. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May.
  3. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
  4. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-94, October.
  5. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
  6. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  7. Chiswick, Barry R & Miller, Paul M, 1996. "Ethnic Networks and Language Proficiency among Immigrants," Journal of Population Economics, Springer, vol. 9(1), pages 19-35, February.
  8. Cooper, Russell & John, Andrew, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, MIT Press, vol. 103(3), pages 441-63, August.
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