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Journals / Akdeniz İİBF Dergisi / 2006 / Cilt: 6 - Sayı: 12

The Role of Social Capital and Institutions on the Performance of Macroeconomic Policies

Makroekonomik Politikaların Performansında Sosyal Sermayenin ve Kurumların Rolü

Hacer OĞUZ
Pages
79–107
Publication Date
2022-10-11
DOI
—
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

The main solutions proposed to overcome the dynamic inconsistency of optimal policies are to conduct the optimal policies by introducing binding rules and to design institutions.

📌 3 Key Takeaways

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Objective & Hypothesis:While social capital and institutions have direct effects on economic development and welfare by means of private decision makers’ utility, production and cost functions and constraints that they are subject to, these social factors have also indirect effect over them through the interactions between the private economic decision makers and economic policy authorities.
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Key Findings & Data:Before the social capital and institutions have not become popular study subjects in the economics, Kydland and Prescott (1977) had conducted a dynamic policy analysis and reached to the famous result, called ‘’dynamic inconsistency of optimal policies’’.
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Conclusion & Impact:The main solutions proposed to overcome the dynamic inconsistency of optimal policies are to conduct the optimal policies by introducing binding rules and to design institutions.
🔬Design:Research Article
📍Scope:Comprehensive Sample
⚙️Variables:Domain Parameters

Abstract

While social capital and institutions have direct effects on economic development and welfare by means of private decision makers’ utility, production and cost functions and constraints that they are subject to, these social factors have also indirect effect over them through the interactions between the private economic decision makers and economic policy authorities. In this article, this indirect effect is studied. Before the social capital and institutions have not become popular study subjects in the economics, Kydland and Prescott (1977) had conducted a dynamic policy analysis and reached to the famous result, called ‘’dynamic inconsistency of optimal policies’’. This finding reveals that trust is important for the achievement of economic policies. Because of social capital and institutions are the main determining factors of trust they affect the achievement of economic policies indirectly. Hence, they should be taken into account. The main solutions proposed to overcome the dynamic inconsistency of optimal policies are to conduct the optimal policies by introducing binding rules and to design institutions.

Özet

Sosyal sermaye ile kurumlar bir ekonominin gelişimini ve refahını özel karar birimlerinin fayda, üretim ve maliyet fonksiyonları ile tabi oldukları kısıtlar yoluyla doğrudan etkilerken, özel karar birimleri ile iktisat politikası otoriteleri arasındaki etkileşim yoluyla da dolaylı biçimde etkilemektedir. Bu makalede belirtilen dolaylı etki incelenmektedir. Sosyal sermaye ile kurumlar iktisatta henüz popüler araştırma konuları değil iken, Kydland ve Prescott (1977) dinamik bir politika analizi gerçekleştirerek ünlü “optimal politikaların dinamik tutarsızlığı” sonucuna ulaşmıştır. Bu bulgu güvenin politikaların başarısında önemli olduğunu göstermektedir. Sosyal sermaye ile kurumlar güvenin etkin unsurları olduklarından iktisat politikalarının başarısını dolaylı biçimde etkilemektedir ve hesaba katılmaları gerekir. Optimal politikaların dinamik tutarsızlığı sorununu aşmak için optimal politikaları bağlayıcı kurallarla yönetmek ya da kurumlar oluşturmak başlıca çözüm önerileridir.

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Cite This Article

OĞUZ, H. (2022). The Role of Social Capital and Institutions on the Performance of Macroeconomic Policies. Akdeniz İİBF Dergisi, Cilt: 6 - Sayı: 12, 79–107. https://ajindex.com/articles/433221

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