Open AccessLUXURY GOODS VS NECESSITY GOODS: WHICH GOODS CONTRIBUTE TO ENHANCEMENT OF THE NATIONAL WEALTH?
Author(s) -
Yasunori Fujita
Publication year - 2018
Publication title -
international journal of research - granthaalayah
Language(s) - English
Resource type - Journals
eISSN - 2394-3629
pISSN - 2350-0530
DOI - 10.29121/granthaalayah.v6.i2.2018.1556
Subject(s) - luxury goods , construct (python library) , speciality goods , investment (military) , product market , goods and services , public good , commerce , capital good , business , economics , market economy , microeconomics , marketing , political science , incentive , politics , computer science , law , programming language
How do luxury goods affect the national wealth? This is a topic that can go back to the seventeenth century. In the present paper, we tackle this problem by examining if the innovation accelerates the generation of luxury goods market. The framework we construct is a model where one firm intends an investment under uncertainty that is expressed by geometric Brownian motion. It is revealed that innovation accelerates the generation of luxury goods market, that is, luxury goods contribute to market generation, as well as enhancement of the national wealth.