Social Capital as an Engine of Growth: Multisectoral Modeling and Implications

Youyou Baende Bofota, Raouf Boucekkine () and Alain Pholo Bala ()
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Youyou Baende Bofota: IRES - Institute for Economic and Social Research - UCL - Université Catholique de Louvain = Catholic University of Louvain

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Abstract: We propose an endogenous growth model incorporating social capital. Social capital serves only as an input in the production of human capital and it involves a cost in terms of the final good. In contrast to alternative specifications, this model ensures that social capital enhances productivity gains by playing the role of a timing belt that drives the transmission and propagation of all productivity shocks. We find that, depending on the measure of social capital, the elasticity of human capital with respect to social capital varies from 6% to 10%. Finally, we investigate the short-term dynamics and imbalance effect properties of the model, depending on the value of this elasticity. In particular, we show that when the substitutability of social capital for human capital increases, the economy is better equipped to surmount initial imbalances, as individuals may allocate more working time to the final good sector without impeding economic growth.

Keywords: Social Capital; Human Capital; Economic Growth; Imbalance Effects (search for similar items in EconPapers)
Date: 2016-12
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Citations: View citations in EconPapers (6)

Published in Macroeconomic Dynamics, 2016, 20 (08), pp.2093--2122. ⟨10.1017/S1365100515000243⟩

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Related works:
Journal Article: SOCIAL CAPITAL AS AN ENGINE OF GROWTH: MULTISECTORAL MODELING AND IMPLICATIONS (2016)
Working Paper: Social Capital as an Engine of Growth. Multisectoral Modelling and Implications (2012)
Working Paper: Social Capital as an Engine of Growth: Multisectoral Modelling and Implications (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01447875

DOI: 10.1017/S1365100515000243

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