The rise of mass consumption societies

Kiminori Matsuyama

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper develops a model to understand mechanisms behind the rise of mass consumption societies. The development process depicted in the model follows the Flying Geese pattern, in which a series of industries takes off one after another. As productivity improves in these industries, each consumer good becomes affordable to an increasingly large number of households, which constantly expand the range of goods they consume. This in turn generates larger markets for consumer goods, which leads to further improvement in productivity. In order for such two-way causality to generate virtuous cycles of productivity gains and expanding markets, income distribution should be neither too equal nor too unequal. Some income inequality is needed for the economy to take off; too much equality means that the economy stagnates in a poverty trap. With too much inequality, the economy's development stops prematurely. The rise of a mass consumption society is thus an essential element for sustainable development

Keywords: Income distribution; earning-by-doing; endogenous technological changes; nonhomothetic preferences; demand complementarity; the domino effect; cooperative dynamical systems (search for similar items in EconPapers)
JEL-codes: O11 O12 O33 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2000-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://eprints.lse.ac.uk/6656/ Open access version. (application/pdf)

Related works:
Journal Article: The Rise of Mass Consumption Societies (2002)
Working Paper: The Rise of Mass Consumption Societies (2000)
Working Paper: The Rise of Mass Consumption Societies (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:6656

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