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Macroeconomic implications of conspicuous consumption: A Sombartian dynamic model

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  • Yamada, Katsunori
Abstract
This paper presents a dynamic general equilibrium model in which consumers have status preference. I investigate the manner in which capital accumulation is impeded by conspicuous consumption i la Corneo and Jeanne [Corneo, G., Jeanne, O., 1997a. Conspicuous consumption, snobbism and conformism. Journal of Public Economics 66, 55-71]. Following the literature, social norms are given as either bandwagon type or snob type. I show that when the economy is characterized by a bandwagon type social norm, capital accumulation exhibits interesting patterns. Those patterns include, for example, an oscillating convergence path: the rise of the economy feeds its decay through conspicuous consumption and that decay suppresses conspicuous consumption and engenders prosperity, as predicted by Sombart [Sombart, W., 1912. Liebe, Luxus und Kapitalismus, Deutscher Taschenbuch Verlag, Germany (reprinted 1967)].

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  • Yamada, Katsunori, 2008. "Macroeconomic implications of conspicuous consumption: A Sombartian dynamic model," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 322-337, July.
    • Handle: RePEc:eee:jeborg:v:67:y:2008:i:1:p:322-337
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    References listed on IDEAS

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    6. Adrian de la Garza & Atsushi Sannabe & Katsunori Yamada, 2008. "Job Satisfaction and Happiness: New Evidence from Japanese Union Workers," Discussion Papers in Economics and Business 08-10, Osaka University, Graduate School of Economics.
    7. Katsunori Yamada & Masayuki Sato & Yasuhiro Nakamoto, 2009. "Measurement of Social Preference from Utility-Based Choice Experiments," ISER Discussion Paper 0759, Institute of Social and Economic Research, Osaka University.
    8. Caulkins, Jonathan P. & Feichtinger, Gustav & Grass, Dieter & Hartl, Richard F. & Kort, Peter M. & Seidl, Andrea, 2015. "Capital stock management during a recession that freezes credit markets," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 1-14.

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