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Germs, Social Networks and Growth

Author Info

Listed author(s):
  • Alessandra Fogli
  • Laura Veldkamp

Abstract

Does the pattern of social connections between individuals matter for macroeconomic outcomes? If so, where do these differences come from and how large are their effects? Using network analysis tools, we explore how different social network structures affect technology diffusion and thereby a country's rate of growth. The model also explains how different social networks may emerge endogenously in response to the prevalence of infectious disease. Initial differences in disease prevalence can produce different network structures, leading to divergent levels of income. We compare calibrated model predictions with data. The model and data agree that a one-standard-deviation increase in our index of network diffusion speed results in output growth that is 1/2% higher per year.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18470.

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Date of creation: Oct 2012
Handle: RePEc:nbr:nberwo:18470
Note: DEV EFG
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Find related papers by JEL classification:
  • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
  • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
  • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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  1. Robert E. Lucas Jr. & Benjamin Moll, 2014. "Knowledge Growth and the Allocation of Time," Journal of Political Economy, University of Chicago Press, vol. 122(1), pages 1-51.
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Cited by:

  1. Lindner, Ines & Strulik, Holger, 2014. "From tradition to modernity: Economic growth in a small world," Journal of Development Economics, Elsevier, vol. 109(C), pages 17-29.
  2. Elsner, Benjamin & Narciso, Gaia & Thijssen, Jacco J. J., 2013. "Migrant Networks and the Spread of Misinformation," IZA Discussion Papers 7863, Institute for the Study of Labor (IZA).
  3. Paolo Zeppini & Koen Frenken & Luis R. Izquierdo, 2013. "Innovation diffusion in networks: the microeconomics of percolation," Working Papers 13-02, Eindhoven Center for Innovation Studies, revised Feb 2013.
  4. Cavalcanti, Tiago & Giannitsarou, Chryssi, 2015. "Growth and Human Capital: A Network Approach," CEPR Discussion Papers 10492, C.E.P.R. Discussion Papers.
  5. Dutz, Mark A., 2013. "Resource reallocation and innovation : converting enterprise risks into opportunities," Policy Research Working Paper Series 6534, The World Bank.

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