Wachstum und soziale Integration in dualistischen Volkswirtschaften.

University of Mannheim. Referent: Prof. Dr. Jürgen Schröder; Koreferent: Prof. Dr. Martin Hellwig. Peter Lang, Frankfurt am Main 1999, ISBN 3-631-34323-X

My PhD dissertation is written and published as a monograph in German language. It is not really a monograph, though — it was my attempt to understand the real economic implications of social learning in terms of distribution and growth. What came out of it was a number of papers on this enormous topic that were rather unrelated — I am grateful to have had advisors willing to accept a US-style dissertation in Germany at the end of the nineties. While there is no English language version of the entire monograph, three out of four chapters were separately published as English language discussion papers.

Social interactions – Is there really an identification problem?

Institut für Volkswirtschaftslehre und Statistik Universität Mannheim, Discussion Paper No. 567-99, November 1999. pdf

Social interactions are central to economic theory. This essay examines the position of Charles F. Manski with respect to the inferential problems posed by social effects. He maintains that, as a rule, models with social effects are not identified. Only under very favourable conditions, he claims, can they be distinguished from other reasons for correlations within social groups, such as selectivity. It is shown here that this argument depends critically on a special assumption. In Manski’s econometric model, social effects do not flow from the outcomes realized within the group, but from their conditional mathematical expectations. By relaxing this assumption, a fully identified model is obtained. Furthermore, FIML estimators for all parameters are explic- itly calculated and statistically evaluated.

Social learning in dualistic societies: Segregation, growth and distribution.

Institut für Volkswirtschaftslehre und Statistik. Universität Mannheim, Discussion Paper No. 571-99, January 2000. pdf

Using a simple model of social learning, we endogenize growth and distribution in a dualistic developing society. For given parameters of the learning technology, a trade-off between growth and equity results. On the other hand, more intensive social interaction between agents will raise the growth rate and lower the income differential at the same time. The economic consequences of lacking social integration are sluggish growth and high inequality.

Ethnic dualism and communication costs – Explaining segmentation and wage inertia.

Institut für Volkswirtschaftslehre und Statistik. Universität Mannheim, Discussion Paper No. 593-2000, November 2000. pdf

What is the impact of international migration on the wage structure? Empirically, it is difficult to find any effect at all. This essay gives a new theoretical explanation for this conspicuous absence, emphasizing non-convexities in the technology of individual firms due to communication costs. With high costs of coordination between workers, the labour force will segregate on the workshop level. In this case, the aggregate production technology has linear segments, and within certain bounds, additional labour input is absorbed without changing the relative factor prices. A local non-substitution theorem is derived.