Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73641
Authors: 
Kapeller, Jakob
Schütz, Bernhard
Year of Publication: 
2012
Series/Report no.: 
Working Paper, Department of Economics, Johannes Kepler University of Linz 1213
Abstract: 
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.
JEL: 
B52
D11
E12
E20
Document Type: 
Working Paper

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