Economic Growth, Technological Progress, and Social Capital: The Inverted U Hypothesis

Abstract

We set up a theoretical framework to analyze the possible role of economic growth and technological progress in the erosion of social capital. Under certain parameters, the relationship between technological progress and social capital can take the shape of an inverted U curve. We show the circumstances allowing the economy to follow trajectories where the stock of social capital grows endogenously and unboundedly.Economic growth; social capital; social norms; technological progress.