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Conspicuous Consumption, Inequality and Debt: The Nature of Consumption‐driven Profit‐led Regimes
Author(s) -
Kapeller Jakob,
Schütz Bernhard
Publication year - 2015
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12061
Subject(s) - economics , consumption (sociology) , profit (economics) , debt , microeconomics , conspicuous consumption , wage , inequality , autonomous consumption , labour economics , neoclassical economics , macroeconomics , sociology , mathematics , mathematical analysis , social science , institutional economics
This paper extends the theoretical concept of wage‐led and profit‐led demand regimes by incorporating relative consumption concerns. Specifically, it integrates the V eblenian concept of conspicuous consumption into the B haduri– M arglin 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 J oneses’ may increase consumption and, hence, lead to a consumption‐driven profit‐led regime .