Working Paper: CEPR ID: DP16446
Authors: Marc Fleurbaey; Ravi Kanbur; Dennis Snower
Abstract: A model that only focuses on economic relations, and in which efficiency and equity are defined in terms of resource allocation may miss an important part of the picture. We propose an integrated model that embeds economic activities in a larger game of social interactions, and define comprehensive notions of efficiency and equity. Social interactions provide additional sources of inefficiencies and inequalities, including through the mere lack of coordination between the regulation mechanisms of the economic sphere and the social sphere. Remedies may require more than market solutions and redistribution of resources. In particular, social norms are likely to play an important role.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| traditional economic models (F11) | economic outcomes (F61) |
| social dimensions (Z13) | economic outcomes (F61) |
| economic inequality (D31) | social inequality (I14) |
| social inequality (I14) | economic inequality (D31) |
| social norms (Z13) | economic efficiency (D61) |
| economic efficiency (D61) | social interactions (Z13) |
| socioeconomic efficiency (D61) | economic and social interactions (A13) |
| coordination between economic and social spheres (P21) | Pareto efficiency (D61) |