No pain, no gain: implications in consumption and economic growth

Tianyu Sun and Liu Tian

No 95fdm, SocArXiv from Center for Open Science

Abstract: Abstract Demand saturation occurs along with economic development, but the theoretical basis for demand saturation is lacking. This study adds to literature by proposing a novel concept named utilization cost, which denotes the physical or mental burden incurred to obtain utility. Correspondingly, we distinguish between quantity and quality of consumption and construct a general utility function. With a generative decision procedure, the analysis shows that utilization costs help to explain the economic dynamics across development stages in terms of demand saturation. And, the long-term state of demand is affected by the properties of utilization costs, determining development directions.

Date: 2023-07-24
New Economics Papers: this item is included in nep-gro and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:95fdm

DOI: 10.31219/osf.io/95fdm

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