Negative externalities as the engine of growth in an evolutionary context

We present a simple growth model which has two original features: the strategic context considered, which is an evolutionary game, and the growth mechanism described, in which growth is caused by negative externalities. The emphasis in this growth mechanism is evidently different from that placed on positive externalities by current endogenous growth models. In this model welfare depends on three goods: leisure, a free environmental renewable resource, and a non-storable output. The environmental resource is subject to negative externalities, that is, it is deteriorated by the production of the output. Faced with a forced reduction of the resource, agents may react by increasing the labor supply in order to produce and consume substitutes for the diminishing resource, i. e. they can raise their defensive expenditures. The increase in production and consumption that follows, i.e. growth, generates a further deterioration of the environmental resource, thus giving rise to a self-feeding growth process. The conditions under which multiple equlibria and Pareto-worsening growth dynamics arise, are analysed. Beside showing the logical possibility that negative externalities are the engine of growth, we suggest that the case analysed may be of practical relevance, i.e., that negative externalities may play an important role in many episodes of growth. This role is widely recognized by social sciences other than economics. We suggest that the model may be interpreted as a push development model and that it may also contribute to explain some aspects of growth in advanced countries

Social Participation and Hours Worked

We investigate the relationship between social participation and the hours worked in the market. Social participation is the component of social capital that measures individuals? engagement in groups, associations and non-governmental organizations. We provide a model of consumer choice where social participation may be either a substitute or a complement to material consumption ? depending on whether participation is instrumentally or non-instrumentally motivated ? and where a local environment with greater social participation increases the return to individual participation. We carry out an empirical investigation of this framework using survey data on United States for the period 1972-2004. We find that non-instrumental social participation substantially decreases the hours worked, while instrumental social participation substantially increases them. Moreover, evidence is consistent with the idea that a local environment with greater social participation fosters individual social participation.social participation; relational goods; social capital; work hours; instrumental and non-instrumental motivations

Happy for How Long? How Social Capital and GDP relate to Happiness over Time

What does predict the evolution over time of subjective well-being? We answer this question correlating cross country time series of subjective well-being with the time series of social capital and/or GDP. First, we adopt a bivariate methodology similar to the one used used by Stevenson and Wolfers (2008), Sacks et al. (2010), Easterlin and Angelescu (2009), Easterlin et al. (2010). We find that in the long (at least 15 years) and medium run (6 years) social capital is a powerful predictor of the evolution of subjective well-being. In the short-term (2 years) this relationship weakens. Indeed, short run changes in social capital predict a much smaller portion of the changes in subjective well-being, compared to longer periods. GDP follows a reverse path: in the short run it is more positively correlated to the changes in well-being than in the medium-term, while in the long run the correlation vanishes. Moreover, we run trivariate regressions of time series of subjective well-being on time series of both social capital and GDP, which confirm the results from bivariate analysis.Easterlin paradox; GDP; economic growth; subjective well-being; happiness; life satisfaction; social capital; time-series; short run; medium run

Negative externalities as the engine of growth in an evolutionary context

We present a simple growth model which has two original features: the strategic context considered, which is an evolutionary game, and the growth mechanism described, in which growth is caused by negative externalities. The emphasis in this growth mechanism is evidently different from that placed on positive externalities by current endogenous growth models. In this model welfare depends on three goods: leisure, a free environmental renewable resource, and a non-storable output. The environmental resource is subject to negative externalities, that is, it is deteriorated by the production of the output. Faced with a forced reduction of the resource, agents may react by increasing the labor supply in order to produce and consume substitutes for the diminishing resource, i. e. they can raise their defensive expenditures. The increase in production and consumption that follows, i.e. growth, generates a further deterioration of the environmental resource, thus giving rise to a self-feeding growth process. The conditions under which multiple equlibria and Pareto-worsening growth dynamics arise, are analysed. Beside showing the logical possibility that negative externalities are the engine of growth, we suggest that the case analysed may be of practical relevance, i.e., that negative externalities may play an important role in many episodes of growth. This role is widely recognized by social sciences other than economics. We suggest that the model may be interpreted as a push development model and that it may also contribute to explain some aspects of growth in advanced countries.Negative externalities; environmental defensive expenditures; undesirable economic growth; evolutionary games; happiness

Endogenous growth, decline in social capital and expansion of market activities

We model in an endogenous growth set-up the hypotheses that the expansion of market activities weakens social capital formation, and that firms can invest in formal mechanisms of control and enforcement to substitute for social capital (trust, work ethics, honesty). The model shows that the economy tends to grow faster when it is relatively poorer in social capital and that perpetual growth can be consistent with the progressive erosion of social capital. These results may help reconciling Putnam’s claim that social capital has declined in the U.S. with the satisfactory growth performance of the U.S. economy over the same period.Generalized trust; externalities; marketization; social assets

The Social Context of the Labor Supply

In this paper we empirically investigate the relationship between social capital and the supply of labor. We identify social capital with non-market relationships. Data are obtained from the US General Social Survey for the period 1976-2004. We find evidence that social capital affects the supply of labor. In particular non-instrumental relations reduce the supply of labor, whereas instrumental relations increase it. Moreover, there are substantial differences between men and women: social capital has a greater impact on the labor supply of women. Our findings suggest that Putnam’s thesis that the decline of US social capital is largely due to the increase in participation of women to the labor market may be partly reversed: the decline of US intrinsic social capital has fostered women’s labor market participation.intrinsic motivations, labor supply, relational goods, social capital

From the Sakai-Sugimoto Model to the Generalized Skyrme Model

We derive the generalized Skyrme model as a low-energy effective model of the Sakai-Sugimoto model. The novelty with the past is the presence of the sextic term equal to the topological charge squared. This term appears when the $\omega$ meson, and the tower of states on top of it, are integrated out. We claim that, in the small 't Hooft coupling limit, the instanton is well described by a Skyrmion arising from the low energy effective Lagrangian of the Sakai-Sugimoto model. The sextic term plays a dominant role in this limit. Moreover, when a pion mass term is added we recover the BPS Skyrme model in the small 't Hooft coupling limit.Comment: 17 pages, 6 figures. v2: minor correction

Social capital as disease prevention

Increasing demand for healthcare in developed countries raises concerns about the sustainability of spending on healthcare. Building on epidemiological, medical, economic, sociological and psychological research, I argue that a well-being and social capital crisis largely explains rising healthcare demand. There is compelling evidence that increasing dissatisfaction has caused an increase in morbidity and mortality rates in the US. A main policy recommendation is to tackle declining connections and the spread of social isolation in order to increase well-being and health. I review literature suggesting three domains where policies for social capital can be implemented: urban planning, schooling and regulation of advertising. Moreover, a crisis of trust between physicians and patients underlies the increasing phenomenon of defensive medicine that weighs substantially on healthcare spending. Policies aimed at tackling defensive medicine are discusse

Sociability Predicts Happiness: World-Wide Evidence from Time Series

We provide macro evidence that in the long run the trends of social capital are a strong predictor of the trends of subjective well-being. Our measure of social capital is the individual membership in groups or associations. We apply the bivariate methodology used in Easterlin and Angelescu (2009) to investigate the long run relationship between subjective well-being and income. We consider all countries for which there exist comparable long time series on social capital, for a total of 14 developed and 5 developing countries. Moreover, we provide several robustness checks of Easterlin and Angelescu’s analysis, confirming confirming that they are unrelated in the long-term.subjective well-being; life satisfaction; social capital; sociability; relational goods; time-trends

Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter?

Using longitudinal data on households living in Germany, we quantify what part of the change in subjective well-being observed over the last two decades is predicted by changes in variables which typically show strong cross-sectional correlation with subjective well-being. We especially focus on absolute income, income comparisons, income adaptation, and sociability, ?nding that all have some predictive power. The increase in sociability indicators predicts the largest positive change in subjective well-being. Absolute income, income comparisons and income adaptation also predict substantial changes in subjective well-being, if taken separately. However, if considered together their net prediction is quite small: the positive change predicted by income growth is compensated for about three fourths by the joint negative predictions due to income comparison and income adaptation. Finally, we ?nd that aging of the population predicts the largest negative change in subjective well-being. This result appears to hinge on the large loss of satisfaction experienced by individuals in old age.Subjective well-being; Life satisfaction; Social capital; Sociability; Relational goods; Relative income; Social comparisons; Income adaptation