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From Worship to Worldly Pleasures: Secularization and Long-Run Economic Growth

  • Holger Strulik

    (Georg-August-University Göttingen)

In medieval times, most people identifi ed with religious values and aggregate income and productivity grew at glacier speed. In the 20th century, religion played a much lesser role in daily life and income and productivity grew at high and unprecedented rates. The present paper develops a simple economic theory of identity choice that explains both stylized facts as well as a period of secularization during which an increasing share of the population abandons religious identity for worldly pleasures and aggregate productivity takes off . An extension of the basic model investigates the Protestant reformation as an intermediate stage. Another extension introduces socially-dependent religious preferences, establishes the endogenous emergence of multiple, self-ful lling equilibria, and demonstrates how a social multiplier amplifi es the speed of transition.

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File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_116.pdf
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Paper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 116.

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Date of creation: 11 Jun 2012
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Handle: RePEc:got:gotcrc:116
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