Social Capital and Market Centralisation: A Two-Sector Model
We develop a two-sector model to analyze which kind of social organization generates social capital. The hypothesis is that social capital must be added as an important production factor when considering decentralization of production. Thus, market centralization processes in a capitalist society eventually may fragmentize and thus destroy social capital if the positive externality of local production and social capital is not taken into account. To our knowledge, no such attempt to model social capital has yet been undertaken and this gap or ‘missing link’ in economic debates has to be developed to grasp a more holistic understanding of the big differences in the wealth of nations or regions. The model shows that if the policy maker decides to centralize the economy, then the economy moves from an potentially stable equilibrium to an unstable one that may under certain condition even fluctuate forever.
|Date of creation:||10 Dec 2004|
|Contact details of provider:|| Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark|
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anders Poulsen & Gert Svendsen, 2005. "Social Capital and Endogenous Preferences," Public Choice, Springer, vol. 123(1), pages 171-196, April.
- Aditya Goenka & Odile Poulsen, 2005.
"Indeterminacy and labor augmenting externalities,"
Journal of Economics,
Springer, vol. 86(1), pages 143-166, December.
- Paldam, Martin & Svendsen, Gert Tinggaard, 2000. "An essay on social capital: looking for the fire behind the smoke," European Journal of Political Economy, Elsevier, vol. 16(2), pages 339-366, June.
- Drugeon, Jean-Pierre & Venditti, Alain, 2001. "Intersectoral external effects, multiplicities & indeterminacies," Journal of Economic Dynamics and Control, Elsevier, vol. 25(5), pages 765-787, May.
- Paldam, M. & Svendsen, G.T., 2000.
"Missing Social Capital and the Transition in Eastern Europe,"
00-5, Aarhus School of Business - Department of Economics.
- Paldam, Martin & Svendsen, Gert Tinggaard, 2000. "Missing social capital and the transition in Eastern Europe," Working Papers 00-5, University of Aarhus, Aarhus School of Business, Department of Economics.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Paldam, Martin, 2000. " Social Capital: One or Many? Definition and Measurement," Journal of Economic Surveys, Wiley Blackwell, vol. 14(5), pages 629-653, December.
- Svendsen, G.T., 1998. "Social Capital, Economic Growth and Transition Economies," Papers 98-2, Aarhus School of Business - Department of Economics.
- H. Uzawa, 1961. "Neutral Inventions and the Stability of Growth Equilibrium," Review of Economic Studies, Oxford University Press, vol. 28(2), pages 117-124.
- Benhabib, Jess & Nishimura, Kazuo, 1983.
"Competitive Equilibrium Cycles,"
83-30, C.V. Starr Center for Applied Economics, New York University.
- Jean-Pierre Drugeon & Odile Poulsen & Alain Venditti, 2003. "On Intersectoral allocations, factors substitutability and multiple long-run growth paths," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(1), pages 175-183, 01.
When requesting a correction, please mention this item's handle: RePEc:hhs:aareco:2004_012. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helle Vinbaek Stenholt)
If references are entirely missing, you can add them using this form.