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No pain, no gain: implications in consumption and economic growth

Author

Listed:
  • Sun, Tianyu
  • Tian, Liu
Abstract
Demand saturation occurs along with economic development, but the theoretical basis for demand saturation is lacking. This study adds to literature by proposing a novel concept named utilization cost, which denotes the physical or mental burden incurred to obtain utility. Correspondingly, we distinguish between quantity and quality of consumption and construct a general utility function. With a generative decision procedure, the analysis shows that utilization costs help to explain the economic dynamics across development stages in terms of demand saturation. And, the long-term state of demand is affected by the properties of utilization costs, determining development directions.

Suggested Citation

  • Sun, Tianyu & Tian, Liu, 2023. "No pain, no gain: implications in consumption and economic growth," MPRA Paper 118081, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118081
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Demand saturation; Consumption; Economic growth;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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