Social Capital and Market Centralisation: A Two-Sector Model

Abstract: We develop a two-sector model to analyze which kind of social

organization generates social capital. The hypothesis is that social capital must

be added as an important production factor when considering decentralization

of production. Thus, market centralization processes in a capitalist society eventually

may fragmentize and thus destroy social capital if the positive externality

of local production and social capital is not taken into account. To our knowledge,

no such attempt to model social capital has yet been undertaken and this

gap or ‘missing link’ in economic debates has to be developed to grasp a more

holistic understanding of the big differences in the wealth of nations or regions.

The model shows that if the policy maker decides to centralize the economy,

then the economy moves from an potentially stable equilibrium to an unstable

one that may under certain condition even fluctuate forever.

Keywords: Social capital; market centralization; two-sector model; economic growth growth (search for similar items in EconPapers)
JEL-codes: A12 C71 D23 D60 D70 Z13 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2004-12-10
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.hha.dk/nat/wper/04-12_odpgts.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:aareco:2004_012

More papers in Working Papers from University of Aarhus, Aarhus School of Business, Department of Economics The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Helle Vinbaek Stenholt ( this e-mail address is bad, please contact ).