Does social capital explain the Solow residual? A DSGE approach

Amedeo Argentiero, Roy Cerqueti and Fabio Sabatini

Structural Change and Economic Dynamics, 2021, vol. 58, issue C, 35-53

Abstract: Social capital plays a role in many desirable economic outcomes. We analyze how these beneficial effects translate into the performance of economies by developing a dynamic stochastic general equilibrium (DSGE) model featuring the role of social capital in explaining the Solow residual. We then simulate and estimate the model with Bayesian techniques using Italian data. Our framework fits actual data better than a standard DSGE model, suggesting that social capital may improve the economic performance via its impact on total factor productivity. Including human capital in the model further raises social capital’s ability to explain the Solow residual.

Keywords: social capital; Total factor productivity; Solow residual; DSGE models (search for similar items in EconPapers)
JEL-codes: E12 E22 O11 Z1 Z13 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Does social capital explain the Solow residual? A DSGE approach (2021)
Working Paper: Does social capital explain the Solow residual? A DSGE approach (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:58:y:2021:i:c:p:35-53

DOI: 10.1016/j.strueco.2021.04.008

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