We propose a stylised dynamic model to understand the role of social networks in the phenomenon we call "globalization … the meeting mechanism displays too little structure for the process to take off). But if globalization does materialize …

perceived consumption needs. We provide a novel method for obtaining identification in social interactions models like ours … household‐level consumer expenditure survey microdata from India. We find that each additional rupee spent by one's peers … inequality‐neutral social welfare, by reducing peer consumption externalities. We show welfare gains of billions of dollars per …