IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Social Infrastructure and the Preservation of Physical Capital: Equilibria and Transitional Dynamics

  • Helena Soares

    ()

    (ISCTE-IUL, Business School, Quantitative Methods Department and BRU-IUL)

  • Tiago Neves Sequeira

    ()

    (Universidade da Beira Interior, Management and Economics Department and CEFAGE - UBI)

  • Pedro Macias Marques

    ()

    (University of Évora, CIMA ? Research Centre in Mathematics and Applications)

  • Orlando Gomes

    ()

    (ISCAL - Lisbon Polytechnic Institute and BRU-IUL)

  • Alexandra Ferreira-Lopes

    ()

    (ISCTE-IUL, Business School, Department of Economics and BRU-IUL and CEFAGE - UBI)

We study the mechanisms according to which social infrastructure influences the preservation of physical capital and, consequently, economic growth. The model considers that social infrastructure is a specific type of human capital, which acts in order to preserve already existing physical capital, by, e.g., reducing the incentive for rent seeking or corruption. Using an innovative methodology in economics, the Gröbner bases, we study the equilibrium of our model and conclude for the existence of two feasible steady-states or of unicity according to different combinations of parameters, highlighting a trade-off between consumption and production on one hand and social infrastructure and physical capital accumulation, on the other. We also present sufficient conditions for saddle-path stability. Finally, we describe transitional dynamics and calculate welfare effects from which we show that strengthening social infrastructure increases welfare.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://bru-unide.iscte.pt/RePEc/pdfs/12-04.pdf
File Function: First version, 2012
Download Restriction: no

Paper provided by ISCTE-IUL, Business Research Unit (BRU-IUL) in its series Working Papers Series 2 with number 12-04.

as
in new window

Length:
Date of creation: 15 Jul 2012
Date of revision:
Handle: RePEc:isc:iscwp2:bruwp1204
Contact details of provider: Web page: http://bru-unide.iscte.pt/
Email:


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.:

as in new window
  1. repec:hal:journl:hal-00171771 is not listed on IDEAS
  2. Niclas Berggren & Henrik Jordahl, 2006. "Free to Trust: Economic Freedom and Social Capital," Kyklos, Wiley Blackwell, vol. 59(2), pages 141-169, 05.
  3. R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December.
  4. Salinas-Jimenez, M del Mar & Salinas-Jimenez, Javier, 2007. "Corruption, efficiency and productivity in OECD countries," Journal of Policy Modeling, Elsevier, vol. 29(6), pages 903-915.
  5. Ahmet Faruk AYSAN & Mustapha Kamel NABLI & Marie-Ange VÉGANZON�S-VAROUDAKIS, 2007. "Governance Institutions And Private Investment: An Application To The Middle East And North Africa," The Developing Economies, Institute of Developing Economies, vol. 45(3), pages 339-377.
  6. yamamura, eiji, 2007. "Heterogeneity, trust, human capital and productivity growth: Decomposition analysis," MPRA Paper 10248, University Library of Munich, Germany.
  7. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2010. "Civic Capital as the Missing Link," EIEF Working Papers Series 1005, Einaudi Institute for Economics and Finance (EIEF), revised Jan 2010.
  8. Timo Trimborn & Karl-Josef Koch & Thomas Steger, 2006. "Multi-Dimensional Transitional Dynamics: A Simple Numberical Procedure," CESifo Working Paper Series 1745, CESifo Group Munich.
  9. Cuesta, J.D., 2004. "From economicist to culturalist development theories: how strong is the relation between cultural aspects and economic development?," ISS Working Papers - General Series 19159, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  10. Kubler, Felix & Schmedders, Karl, 2010. "Competitive equilibria in semi-algebraic economies," Journal of Economic Theory, Elsevier, vol. 145(1), pages 301-330, January.
  11. Breuer, Janice Boucher & McDermott, John, 2009. "Respect, responsibility, and production," MPRA Paper 18111, University Library of Munich, Germany.
  12. Beugelsdijk, S. & Smulders, J.A., 2009. "Bonding and Bridging Social Capital and Economic Growth," Discussion Paper 2009-27, Tilburg University, Center for Economic Research.
  13. Arnold, Lutz G., 1998. "Growth, Welfare, and Trade in an Integrated Model of Human-Capital Accumulation and Research," Journal of Macroeconomics, Elsevier, vol. 20(1), pages 81-105, January.
  14. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January.
  15. Martin S. Chin & Yuan K. Chou, 2004. "Modelling Social Infrastructure and Economic Growth," Australian Economic Papers, Wiley Blackwell, vol. 43(2), pages 136-157, 06.
  16. Claudia Williamson, 2009. "Informal institutions rule: institutional arrangements and economic performance," Public Choice, Springer, vol. 139(3), pages 371-387, June.
  17. Beugelsdijk, Sjoerd & van Schaik, Ton, 2005. "Social capital and growth in European regions: an empirical test," European Journal of Political Economy, Elsevier, vol. 21(2), pages 301-324, June.
  18. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:isc:iscwp2:bruwp1204. 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: (Henrique Monteiro)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.