Conspicuous consumption, inequality and debt: The nature of consumption-driven profit-led regimes

Arbeitspapier

This paper extends the theoretical concept of wage-led and profit-led demand regimes, first introduced by Amit Bhaduri and Steven Marglin in the early 1990s, by incorporating relative consumption concerns. Specifically, it integrates the Veblenian concept of conspicuous consumption into a typical Bhaduri-Marglin model by assuming that relative consumption concerns matter primarily within the working class. If in such a framework the profit share increases and the corresponding decrease in workers' income is distributed unevenly, efforts to keep up with the Joneses may increase consumption and, hence, lead to a consumption- driven profit-led regime. The model's empirical relevance is illustrated with respect to the pre-crisis developments as observed in the U.S.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 1213

Classification and Topics

• Classification: Wirtschaft ; Current Heterodox Approaches: Historical; Institutional; Evolutionary ; Consumer Economics: Theory ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data)

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kapeller, Jakob ; Schütz, Bernhard
• Event: Veröffentlichung
• (who): Johannes Kepler University of Linz, Department of Economics
• (where): Linz
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/73641
• Last update: 10.03.2025, 11:45 AM CET