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Emulation and Consumer Debt: Implications of Keeping-Up with the Joneses

Yk Kim

No 1208, Working Papers from Trinity College, Department of Economics

Abstract: We develop a stock-flow consistent neo-Kaleckian macro model which incorporates consumption emulation and consumer debt accumulation. Income distributional dimension is also incorporated via the conflict-claims approach of inflation. Using this model, we investigate the macroeconomic effects of lower income group's consumption emulation of higher income group through borrowing. We find that emulation could expand aggregate demand and hence generate a faster economic growth. Our results also indicate that consumption emulation could be a source of widening income inequality.

Keywords: consumer debt; emulation; income distribution; growth (search for similar items in EconPapers)
JEL-codes: E12 E44 O41 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012-09
New Economics Papers: this item is included in nep-fdg, nep-mac and nep-pke
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http://www3.trincoll.edu/repec/WorkingPapers2012/WP12-08.pdf First version, 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:tri:wpaper:1208

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