Social Capital, Inequality, and Economic Growth

Stefan Dietrich Josten

Journal of Institutional and Theoretical Economics (JITE), 2004, vol. 160, issue 4, 663-680

Abstract: This paper analyzes a heterogeneous-agents OLG model incorporating both endogenous growth and social capital. An individual can either become an active part of the society's networks of trust and mutual cooperation, thus making a positive contribution to overall social capital, or stay socially disintegrated and free-ride on the community's social capital. In the modelled economy, aggregate output and economy-wide human capital and consumption all grow at the average rate of individual human-capital accumulation. An increase in inequality depresses the community's social capital, which in turn lowers the economy's growth rate.

JEL-codes: D3 O41 Z13 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (12)

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