IDEAS home Printed from https://ideas.repec.org/p/fip/fednsr/26.html
   My bibliography  Save this paper

Language, learning, and location

Author

Listed:
  • A. Andrew John
  • Kei-Mu Yi

Abstract

Language is a fundamental tool for communication of ideas between people, and so is an essential input into production and trade. In general, a society will possess more production and consumption opportunities when all its members share a common language. Neighboring societies and communities likewise have a strong incentive to utilize a common language, and indeed there are countless examples of language assimilation, especially in the last one hundred years. Hence, it is puzzling that more assimilation has not occurred. History has recorded numerous examples of communities that coexist with distinct languages and limited economic interaction. ; This paper presents a stylized model to reconcile both assimilation and non-assimilation. We abstract from cultural and historical factors, which are of course significant, but are present in both. The model has two languages, two locations, and two time periods. Agents are initially endowed with one or both languages and a location. Agents choose whether or not to learn the other language, and subsequently choose whether or not to move to the other region. Language facilitates production: an agent can produce output only in conjunction with others who share the same location and language. Consequently, there are strong incentives to locate with others who share the same language, and to learn the language that others speak. The cost of learning is endogenous: agents who are learning cannot produce. ; Our model delivers a full assimilation equilibrium, as well as geographic and linguistic isolation equilibria. In the latter equilibria, location and language barriers prevent economic interaction from occurring. Increasing returns and strategic complementarities are present, but sometimes they operate locally, in addition to globally.

Suggested Citation

  • A. Andrew John & Kei-Mu Yi, 1997. "Language, learning, and location," Staff Reports 26, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:26
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr26.html
    Download Restriction: no
    File URL: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr26.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. McManus, Walter S, 1985. "Labor Market Costs of Language Disparity: An Interpretation of Hispanic Earnings Differences," American Economic Review, American Economic Association, vol. 75(4), pages 818-827, September.
    2. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 551-575.
    3. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-288, April.
    4. Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
    5. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
    6. Russell Cooper & Andrew John, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(3), pages 441-463.
    7. Williamson, Steve & Wright, Randall, 1994. "Barter and Monetary Exchange under Private Information," American Economic Review, American Economic Association, vol. 84(1), pages 104-123, March.
    8. Roland Benabou, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 619-652.
    9. Grenier, G. & Vaillancourt, F., 1982. "An Economic Perspective on Learning a Second Language," Cahiers de recherche 8238, Universite de Montreal, Departement de sciences economiques.
    10. Katz, Kimberly & Matsui, Akihiko, 2004. "When trade requires coordination," Journal of the Japanese and International Economies, Elsevier, vol. 18(3), pages 440-461, September.
    11. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-345, May.
    12. Laitin, David D., 1994. "The Tower of Babel as a Coordination Game: Political Linguistics in Ghana," American Political Science Review, Cambridge University Press, vol. 88(3), pages 622-634, September.
    13. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    14. Yavas, Abdullah, 1994. "Middlemen in Bilateral Search Markets," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 406-429, July.
    15. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-841, August.
    16. Chiswick, Barry R, 1991. "Speaking, Reading, and Earnings among Low-Skilled Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 149-170, April.
    17. Kiyotaki, Nobuhiro & Wright, Randall, 1993. "A Search-Theoretic Approach to Monetary Economics," American Economic Review, American Economic Association, vol. 83(1), pages 63-77, March.
    18. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Susan W. Parker & Luis Rubalcava & Graciela Teruel, 2002. "Schooling Inequality among the Indigenous: A Problem of Resources or Language Barriers?," Research Department Publications 3134, Inter-American Development Bank, Research Department.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ortega, Javier & Tangeraas, Thomas, 2003. "Unilingual versus Bilingual Education System: A Political Economy Analysis," CEPR Discussion Papers 4003, C.E.P.R. Discussion Papers.
    2. Guillaume Rocheteau & Pierre‐Olivier Weill, 2011. "Liquidity in Frictional Asset Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(s2), pages 261-282, October.
    3. Kiyotaki, Nobuhiro & Lagos, Ricardo & Wright, Randall, 2016. "Introduction to the symposium issue on money and liquidity," Journal of Economic Theory, Elsevier, vol. 164(C), pages 1-9.
    4. Victor Ginsburgh & Shlomo Weber, 2020. "The Economics of Language," Journal of Economic Literature, American Economic Association, vol. 58(2), pages 348-404, June.
    5. Williamson, Stephen & Wright, Randall, 2010. "New Monetarist Economics: Models," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 2, pages 25-96, Elsevier.
    6. Kiminori Matsuyama, 1993. "Modelling Complementarity in Monopolistic Competition," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 11(1), pages 87-108, July.
    7. Richard Horan & Erwin Bulte & Jason Shogren, 2008. "Coevolution of human speech and trade," Journal of Economic Growth, Springer, vol. 13(4), pages 293-313, December.
    8. Susan W. Parker & Luis Rubalcava & Graciela Teruel, 2002. "Schooling Inequality among the Indigenous: A Problem of Resources or Language Barriers?," Research Department Publications 3134, Inter-American Development Bank, Research Department.
    9. Li, Yiting, 1998. "Middlemen and private information," Journal of Monetary Economics, Elsevier, vol. 42(1), pages 131-159, June.
    10. Cheng, Wenli & Yang, Xiaokai, 2004. "Inframarginal analysis of division of labor: A survey," Journal of Economic Behavior & Organization, Elsevier, vol. 55(2), pages 137-174, October.
    11. Li, Yiting, 1995. "Commodity money under private information," Journal of Monetary Economics, Elsevier, vol. 36(3), pages 573-592, December.
    12. Chong, Alberto E., 2006. "Does It Matter How People Speak?," IDB Publications (Working Papers) 1946, Inter-American Development Bank.
    13. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pellizzari, 2015. "Immigration, Housing Discrimination and Employment," Economic Journal, Royal Economic Society, vol. 125(586), pages 82-114, August.
    14. Benjamin Lester & Andrew Postlewaite & Randall Wright, 2011. "Information and Liquidity," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 355-377, October.
    15. Angela Cipollone & Paolo E. Giordani, 2012. "Animal Spirits in Entrepreneurial Innovation: Theory and Evidence," Working Papers CELEG 1201, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    16. David Bowman, 1995. "Constrained suboptimality in economies with limited communication," International Finance Discussion Papers 497, Board of Governors of the Federal Reserve System (U.S.).
    17. Christian Dustmann, 1999. "Temporary Migration, Human Capital, and Language Fluency of Migrants," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(2), pages 297-314, June.
    18. Anna Piil Damm, 2009. "Ethnic Enclaves and Immigrant Labor Market Outcomes: Quasi-Experimental Evidence," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 281-314, April.
    19. Chiswick, Barry R., 2008. "The Economics of Language: An Introduction and Overview," IZA Discussion Papers 3568, Institute of Labor Economics (IZA).
    20. Rocheteau, Guillaume & Wright, Randall, 2013. "Liquidity and asset-market dynamics," Journal of Monetary Economics, Elsevier, vol. 60(2), pages 275-294.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednsr:26. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gabriella Bucciarelli (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.