On Trust Dynamics of Economic Growth

Syed Sibghatullah Shah

MPRA Paper from University Library of Munich, Germany

Abstract: Trust among individuals in society may have various economic and social implications. Though, worldwide data on economic growth rarely consider trust as an ingredient in manipulating economic outcomes. Thus, we include trust instigating from individual, affecting community and state thus, forming trust-based economy. In order to explore the relationship of trust with growth and its benefits implications, this study suggests a model which is validated by Markov process. Consequently, results indicate significant impact of trust on economic growth by achieving convergence in very few iterations in the case of trust-based economy. On the other hand, economy with lowest trust level shows delayed convergence and takes around 4 times more iterations to attain equilibrium. Additionally, socio-economic benefits are more visible in a trust-based economy.

Keywords: Trust; Markov process; Equilibrium; Convergence; Economic Growth (search for similar items in EconPapers)
JEL-codes: C15 C53 D71 E21 H20 O47 Z10 Z13 (search for similar items in EconPapers)
Date: 2019-05-23, Revised 2019-05-30
New Economics Papers: this item is included in nep-gro, nep-mac and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:94095

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