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Diversity and Growth

Author

Listed:
  • Gradstein, Mark

    () (Ben Gurion University)

  • Justman, Moshe

    () (Ben Gurion University)

Abstract

The diversity of social interaction within economic communities affects productivity and growth, and is itself shaped by economic conditions. These reciprocal effects raise the possibility of multiple equilibria, of setting a socially polarized economy stagnating in poverty on a new path of social integration and economic growth through external intervention or an internal political initiative. This paper describes a simple analytical model that captures these reciprocal effects, and sheds light on the role of government capacity, community leadership, federation and external credit or aid, in achieving economic growth through social integration.

Suggested Citation

  • Gradstein, Mark & Justman, Moshe, 2018. "Diversity and Growth," IZA Discussion Papers 11553, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11553
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    References listed on IDEAS

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    More about this item

    Keywords

    cultural diversity; economic growth; social interaction;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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