ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 715
We consider three objects of people's status preference, consumption, physical capital holding and money holding, and show that an economy grows or stagnates depending on which object people most seriously take as status. If the main object of status preference is consumption, a steady state with full employment is reached. If it is physical capital (viz. a producible asset), permanent growth with full employment occurs. However, if it is money (viz. an unproducible asset), stagnation with persistent unemployment arises.
Status Preference Persistent Unemployment Long-Run Growth