This chapter studies the relation between consumption innovation and growth in an economy in which, as in Aoki and Yoshikawa (2002), there are no ‘fixed factors’ of production and differentiated goods are used in production and in consumption. The linear technology of the competitive firms using differentiated goods as inputs is but a special case of Benassy (1998), with the restriction that returns to specialization are zero. Since technology is ultimately of the AK type, there is a source of endogenous growth, and love of variety may affect steady growth by inducing a persistent increase in the savings ratio. This modifies Barro and Sala-I-Martin’s (1995) steady-growth effects of consumption variety in situations where the productivity of inputs is constant.

Caminati, M. (2005). Consumption variety and growth. In Innovation, Unemployment and Policy in the Theories of Growth and Distribution (pp. 51-75). CHELTENHAM : Edward Elgar.

Consumption variety and growth

CAMINATI, MAURO
2005

Abstract

This chapter studies the relation between consumption innovation and growth in an economy in which, as in Aoki and Yoshikawa (2002), there are no ‘fixed factors’ of production and differentiated goods are used in production and in consumption. The linear technology of the competitive firms using differentiated goods as inputs is but a special case of Benassy (1998), with the restriction that returns to specialization are zero. Since technology is ultimately of the AK type, there is a source of endogenous growth, and love of variety may affect steady growth by inducing a persistent increase in the savings ratio. This modifies Barro and Sala-I-Martin’s (1995) steady-growth effects of consumption variety in situations where the productivity of inputs is constant.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11365/24304
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