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Consumption & class in evolutionary macroeconomics

Bernhard Rengs () and Manuel Scholz-Wäckerle ()
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Bernhard Rengs: Vienna University of Technology
Manuel Scholz-Wäckerle: Vienna University of Economics and Business

Journal of Evolutionary Economics, 2019, vol. 29, issue 1, 229-263

Abstract: Abstract This article contributes to the field of evolutionary macroeconomics by highlighting the dynamic interlinkages between micro-meso-macro with a Veblenian meso foundation in an agent-based macroeconomic model. Consumption is dependent on endogenously changing social class and signaling, such as bandwagon, Veblen and snob effects. In particular, we test the macroeconomic effects of this meso foundation in a generic agent-based model of a closed artificial economy. The model is stock-flow consistent and builds upon local decision heuristics of heterogeneous agents characterized by bounded rationality and satisficing behavior. These agents include a multitude of households (workers and capitalists), firms, banks as well as a capital goods firm, a government and a central bank. Simulation experiments indicate co-evolutionary dynamics between signaling-by-consuming and firm specialization that eventually effect employment and consumer prices, as well as other macroeconomic aggregates.

Keywords: Evolutionary macroeconomics; Agent-based modelling; Micro-meso-macro; Conspicuous consumption; Social class; Firm specialization (search for similar items in EconPapers)
JEL-codes: B52 C63 E21 E23 L11 (search for similar items in EconPapers)
Date: 2019
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