Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92752
Authors: 
Ono, Yoshiyasu
Yamada, Katsunori
Year of Publication: 
2012
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 856
Abstract: 
We consider a dynamic macroeconomic model with households that regard relative affluence as social status. The measure of relative affluence can be the ratio to, or the difference from, the social average. The two specifications lead to quite different results: with the ratio specification full employment is necessarily realized, whereas with the difference specification persistent shortages of aggregate demand and employment can arise. Furthermore, using the data of an experiment of affluence comparison we empirically find that the difference specification is far more persuasive than the ratio specification. Thus, the present model provides an analytical framework for persistent stagnation.
Subjects: 
status
stagnation
unemployment
JEL: 
C91
E12
E24
Document Type: 
Working Paper

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