The Effect of Demand-Driven Structural Transformations on Growth and Technological Change

André Lorentz, Tommaso Ciarli, Maria Savona () and Marco Valente

SPRU Working Paper Series from SPRU - Science Policy Research Unit, University of Sussex Business School

Abstract: 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 behaviour 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, firstly, that higher heterogeneity in consumption preferences amplifies and accelerates market dynamics, leading to a swift shift from a Malthusian to a Kaldorian growth pattern. Secondly, consumption smoothing mainly affects the timing of such a take–off. Inertia in consumption delays the occurrence of a Kaldorian engine for growth.

Keywords: consumption; structural change; income distribution; technological change; growth (search for similar items in EconPapers)
JEL-codes: C63 L16 O14 O41 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
https://www.sussex.ac.uk/webteam/gateway/file.php? ... rmations.pdf&site=25

Related works:
Journal Article: The effect of demand-driven structural transformations on growth and technological change (2016)
Working Paper: The effect of demand-driven structural transformations on growth and technological change (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sru:ssewps:2015-04

Access Statistics for this paper

More papers in SPRU Working Paper Series from SPRU - Science Policy Research Unit, University of Sussex Business School Contact information at EDIRC.
Bibliographic data for series maintained by University of Sussex Business School Communications Team ().