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The effect of demand-driven structural transformations on growth and technological change
journal contribution
posted on 2023-06-15, 20:51 authored by André Lorentz, Tommaso CiarliTommaso Ciarli, Maria SavonaMaria Savona, Marco ValenteThe paper analyses the effect of the dynamics of consumption preferences on the dynamics of macro–economic growth. We endogenously derive micro– dynamics of consumption behavior as a result of the increase in the number of income classes. The different degrees of inertia in the adjustment of consumption levels to income changes affect firm selection and the dynamics of market structure, which is ultimately responsible for different regimes of macro–economic growth. We find, first, that higher heterogeneity in consumption preferences amplifies and accelerates market dynamics, leading to a swift shift from a Malthusian to a Kaldorian growth pattern. Second, consumption smoothing mainly affects the timing of such a take–off. Inertia in consumption delays the occurrence of a Kaldorian engine for growth.
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Publication status
- Published
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- Published version
Journal
Journal of Evolutionary EconomicsISSN
0936-9937Publisher
Springer VerlagExternal DOI
Issue
1Volume
26Page range
219-246Department affiliated with
- SPRU - Science Policy Research Unit Publications
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- No
Peer reviewed?
- Yes
Legacy Posted Date
2015-10-22First Compliant Deposit (FCD) Date
2015-10-21Usage metrics
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