Dr. Giacomo Corneo, Free University of Berlin
Giacomo Corneo joins Brookings scholars and colleagues in a discussion of his research on a “socio-economic equilibrium.”
In their collaborative work entitled, A Theory of Symbolic Values, With an Application for Economic Development, Corneo and Jeanne* provide a general framework for thinking about symbolic values in economic settings. They present a theory that addresses the value systems that are consistent with a given resource allocation, and the resource allocations that can be supported by a given value system. This naturally leads to the notion of a “socio-economic equilibrium,” the efficiency properties of which can be studied using the standard tools of economic analysis.
In order to illustrate the potential of their theoretical framework for helping understanding key economic issues, Corneo and Jeanne develop three simple models in which people attach a symbolic value to occupations. The models shed some light on the transition from traditional to modern values, the emergence of tolerant societies, and the possibility of failing economic development because of a cultural trap.
*Dr. Oliver Jeanne is a scholar with the International Monetary Fund.