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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 Valente
The 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.

History

Publication status

  • Published

File Version

  • Published version

Journal

Journal of Evolutionary Economics

ISSN

0936-9937

Publisher

Springer Verlag

Issue

1

Volume

26

Page range

219-246

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2015-10-22

First Compliant Deposit (FCD) Date

2015-10-21

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