Articles

Product-Based Cultural Change: Is the Village Global?

N. MAYSTRE, J. OLIVIER, M. THOENIG, T. VERDIER

Journal of International Economics

March 2014, vol. 92, n°2, pp.212-230

Departments: Finance, GREGHEC (CNRS)

Keywords: Culture, Trade, Persistence, Homogenization

http://ssrn.com/abstract=1484470


We provide a model of product-based cultural change where trade integration leads to cultural convergence. A standard trade model of Dixit–Stiglitz monopolistic competition is coupled with a micro-founded model of cultural dynamics. We show that access to varieties that are attached to a global cultural type changes the incentives of parents to socialize their children and transmit their type. The resulting increase in agents of the global cultural type leads to a magnification of the initial shock. A striking feature of the model is that even temporary shocks to openness may have permanent effects through the changing distribution of preferences in the economy


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