Growth, Stagnation and Status Preference

Ryu-ichiro Murota and Yoshiyasu Ono

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: We consider three objects of people's status preference, consumption, physical capital holding and money holding, and show that an economy grows or stagnates depending on which object people most seriously take as status. If the main object of status preference is consumption, a steady state with full employment is reached. If it is physical capita (viz. a producible asset), permanent growth with full employment occurs. However, if it is money (viz. an unproducible asset), stagnation with persistent unemployment arises.

Date: 2008-06
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Persistent link: http://EconPapers.repec.org/RePEc:dpr:wpaper:0715

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