How do inequalities in cultural engagement impact on economic growth?

In the last years, there has been an emergence of cultural-led development studies. On the one hand, there are studies that explore how culture contributes to regional economic regeneration and to job creation. On the other hand, recent works analyse from a supply-side perspective the complementary relationship between cultural capital and human capital in fostering national economic growth. This paper contributes to this last strand of the literature by analysing how the degree of inequalities in cultural engagement impact on economic growth. The argument is that cultural capital might be more effective in driving economic growth when there are higher rates of cultural engagement across social groups because more people can become inspired to be creative and innovative and because diversity is a source of innovativeness. To justify it, the article deploys a novel approach that combines cultural economics literature with post-Keynesian economics. Their fertile dialogue enables the consideration of power relationships and inequalities. It also furthers the understanding of the role of external demand in shaping economic growth by considering the differences in countries’ productive structure. Hence, a post-Keynesian growth model is adapted to embed inequalities in cultural engagement. Considering the role of the balance of payments constraint on long-run economic growth, the model is applied to different types of productive structures that differ in the uniqueness and diversification of their knowledge networks. The article concludes that higher cultural engagement fosters economic growth and that the size of this effect is stronger and more durable in more complex economies.