A model of veblenian growth

Baochun Peng

Research output: Journal article publicationJournal articleAcademic researchpeer-review

3 Citations (Scopus)

Abstract

This paper introduces a signalling model of conspicuous consumption in the context of an endogenous growth model. Agents purchase luxury goods to signal their social status. 'Invidious Comparison' takes place when rich agents successfully identify themselves, whereas 'Pecuniary Emulation' takes place when some poor agents succeeded in emulating the rich. Demand for new design is created during 'Pecuniary Emulation' as rich agents seek to purchase a good of superior quality in order to distinguish themselves from the poor. The growth process is characterized by creative destruction, and the economy is shown to switch between 'Invidious Comparison' and 'Pecuniary Emulation' along the growth path.
Original languageEnglish
JournalTopics in Macroeconomics
Volume6
Issue number1
DOIs
Publication statusPublished - 1 Jan 2006

Keywords

  • Conspicuous consumption
  • Endogenous growth

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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