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Culture and Market: A Macroeconomic Tale of Two Institutions

Mausumi Das () and Priyanka Arora
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Priyanka Arora: Delhi School of Economics

No 307, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: In this paper we model endogenous evolution of cultural traits which is mediated through market, and examine its impact on long run economic growth. Historically culture has played an important role in the process of economic development. Yet, economic development itself impacts upon the pre-existing cultural values and beliefs. We interact culture with market and show that such interaction may generate multiple growth trajectories depending on the initial distribution of cultural traits in the economy. In particular, an economy may end up in a culture-induced low growth trap in the long run. We also show that over time, with economic development, culture takes a back seat but its initial influence continues to impact long run outcomes.

JEL-codes: D90 O11 Z13 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-04
New Economics Papers: this item is included in nep-cul, nep-evo and nep-gro
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