Germs, Social Networks and Growth

52 Pages Posted: 20 Oct 2012

See all articles by Alessandra Fogli

Alessandra Fogli

Federal Reserve Bank of Minneapolis

Laura Veldkamp

Columbia University - Columbia Business School; National Bureau of Economic Research (NBER)

Date Written: October 2012

Abstract

Does the pattern of social connections between individuals matter for macroeconomic outcomes? If so, where do these differences come from and how large are their effects? Using network analysis tools, we explore how different social network structures affect technology diffusion and thereby a country's rate of growth. The model also explains how different social networks may emerge endogenously in response to the prevalence of infectious disease. Initial differences in disease prevalence can produce different network structures, leading to divergent levels of income. We compare calibrated model predictions with data. The model and data agree that a one-standard-deviation increase in our index of network diffusion speed results in output growth that is 1/2% higher per year.

Suggested Citation

Fogli, Alessandra and Veldkamp, Laura, Germs, Social Networks and Growth (October 2012). NBER Working Paper No. w18470, Available at SSRN: https://ssrn.com/abstract=2164594

Alessandra Fogli (Contact Author)

Federal Reserve Bank of Minneapolis ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States

Laura Veldkamp

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
11
Abstract Views
467
PlumX Metrics