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Elsevier, Journal of International Economics, 2(92), p. 212-230, 2014

DOI: 10.1016/j.jinteco.2013.10.005

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Product-based cultural change: Is the village global?

Journal article published in 2014 by Nicolas Maystre, Olivier Jacques, Thierry Verdier, Mathias Thoenig
This paper is available in a repository.
This paper is available in a repository.

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Abstract

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.