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Social ties and economic development

  • Anjos, Fernando
  • Anchorena, Jose

We develop a parsimonious general equilibrium model where agents allocate time across three activities: production, trade, and leisure. Leisure includes time spent socializing, which economizes transaction costs. Our framework yields multiple equilibria in terms of the number of social ties and predicts that the number of social ties is positively associated with development, a relationship we observe in cross-country data. The model captures additional dimensions of data, namely: (i) increasing income inequality, but converging growth rates; (ii) an association between weak social ties and development; and (iii) an association between number of social ties and size of the transaction sector.

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File URL: http://mpra.ub.uni-muenchen.de/35322/1/MPRA_paper_35322.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35322.

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Date of creation: 08 May 2008
Date of revision: 09 Dec 2011
Handle: RePEc:pra:mprapa:35322
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  1. 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.
  2. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
  3. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
  4. Matthew O. Jackson & Asher Wolinsky, 1994. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Social Capital as Good Culture," Economics Working Papers ECO2007/57, European University Institute.
  6. Patrick Francois & Jan Zabojnik, 2005. "Trust, Social Capital, and Economic Development," Journal of the European Economic Association, MIT Press, vol. 3(1), pages 51-94, 03.
  7. Valerie A. Ramey & Neville Francis, 2006. "A Century of Work and Leisure," NBER Working Papers 12264, National Bureau of Economic Research, Inc.
  8. Mark Aguiar & Erik Hurst, 2006. "Measuring trends in leisure: the allocation of time over five decades," Working Papers 06-2, Federal Reserve Bank of Boston.
  9. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-50, October.
  10. Alesina, Alberto & Giuliano, Paola, 2009. "Family Ties and Political Participation," IZA Discussion Papers 4150, Institute for the Study of Labor (IZA).
  11. Guido Tabellini, 2008. "The Scope of Cooperation: Values and Incentives," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 905-950, August.
  12. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  13. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
  14. Routledge, Bryan R. & von Amsberg, Joachim, 2003. "Social capital and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 167-193, January.
  15. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  16. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  17. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2008. "Alfred Marshall Lecture Social Capital as Good Culture," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 295-320, 04-05.
  18. Kumar, Krishna B. & Matsusaka, John G., 2009. "From families to formal contracts: An approach to development," Journal of Development Economics, Elsevier, vol. 90(1), pages 106-119, September.
  19. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-38, May.
  20. Krugman, Paul, 1991. "History versus Expectations," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 651-67, May.
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