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The spirit of capitalism, social status, money, and accumulation

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  • Heng-fu Zou

    (Public Economics Division, Policy Research Department, The World Bank)

Abstract

This paper demonstrates the unambiguous existence of the Tobin portfolio-shift effect in the wealth-is-status and the spirit-of-capitalism models of growth. Namely, higher inflation leads to higher capital stock in the long run, and inflation increases the endogenous-growth rate of the economy.

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Bibliographic Info

Paper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 99.

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Length: 15 pages
Date of creation: 1998
Date of revision:
Publication status: Published in Journal OF Economics Volume 68, Number 3, Pages 219-233
Handle: RePEc:cuf:wpaper:99

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Web page: http://cema.cufe.edu.cn/
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Keywords: spirit of capitalism; social status; money; growth;

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References

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  1. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October.
  2. Heng-fu Zou, 1991. "The spirit of capitalism and long-run growth," Policy Research Working Paper Series 630, The World Bank.
  3. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  5. Brock, William A, 1974. "Money and Growth: The Case of Long Run Perfect Foresight," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(3), pages 750-77, October.
  6. Harold L. Cole & George J. Mailath & Andrew Postlewaite, 1995. "Incorporating concern for relative wealth into economic models," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum, pages 12-21.
  7. Olivier Jean Blanchard, 1983. "Debt and the Current Account Deficit in Brazil," NBER Chapters, in: Financial Policies and the World Capital Market: The Problem of Latin American Countries, pages 187-198 National Bureau of Economic Research, Inc.
  8. Robson, Arthur J, 1992. "Status, the Distribution of Wealth, Private and Social Attitudes to Risk," Econometrica, Econometric Society, vol. 60(4), pages 837-57, July.
  9. Stockman, Alan C., 1981. "Anticipated inflation and the capital stock in a cash in-advance economy," Journal of Monetary Economics, Elsevier, vol. 8(3), pages 387-393.
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Citations

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Cited by:
  1. Shaw, Ming-Fu & Lai, Ching-Chong & Chang, Wen-Ya, 2005. "Anticipated policy and endogenous growth in a small open monetary economy," Journal of International Money and Finance, Elsevier, vol. 24(5), pages 719-743, September.
  2. Ryu‚Äźichiro Murota & Yoshiyasu Ono, 2011. "Growth, Stagnation And Status Preference," Metroeconomica, Wiley Blackwell, vol. 62(1), pages 122-149, 02.
  3. Jang-Ting Guo & Juin-Jen Chang, 2008. "Social Status and Optimal Income Taxation," Working Papers 200814, University of California at Riverside, Department of Economics, revised Dec 2008.
  4. Ono, Y., 2001. "Growth or Stagnation: Economic Consequences of Status Preference," ISER Discussion Paper 0524, Institute of Social and Economic Research, Osaka University.
  5. Fisher, Walter H. & Hof, Franz X., 2001. "Status Seeking in the Small Open Economy," Economics Series 106, Institute for Advanced Studies.
  6. Cui, Xiaoyong & Gong, Liutang & Yang, Jianfang & Zou, Heng-fu, 2008. "Marshallian time preferences and monetary non-neutrality," Economic Modelling, Elsevier, vol. 25(6), pages 1196-1205, November.
  7. Shu-Hua Chen, 2012. "On the Growth and Stability Effects of Habit Formation and Durability in Consumption," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 283-298, November.
  8. Hung-Ju Chen & Jang-Ting Guo, 2009. "Money and Endogenous Growth in a Cash-in-Advance Model with Social Status," Working Papers 200906, University of California at Riverside, Department of Economics, revised Jun 2009.
  9. Kunting Chen, 2012. "Analysis of the Great Divergence under a Unified Endogenous Growth Model," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 317-353, November.
  10. Pascal Michaillat & Emmanuel Saez, 2014. "An Economical Business-Cycle Model," NBER Working Papers 19777, National Bureau of Economic Research, Inc.
  11. repec:ebl:ecbull:v:5:y:2004:i:1:p:1-13 is not listed on IDEAS
  12. Hsiu-Yun Lee & Yu-Lin Wang & Wen-Ya Chang, 2013. "Can growth-enhanced monetary policy improve welfare when people seek social status?," Journal of Economics, Springer, vol. 110(3), pages 257-272, November.
  13. repec:cuf:journl:y:2013:v:14:i:1:n:5:yang is not listed on IDEAS
  14. Shiyuan Pan & Mengbo Zhang & Heng-fu Zou, 2011. "Status Preference and the Effects of Patent Protection: Theory and Evidence," CEMA Working Papers 588, China Economics and Management Academy, Central University of Finance and Economics.
  15. Qian Yang & Kaiping Peng & Xueya Zhou & Ruoqiao Zheng & Wanhua Peng, 2013. "The Monetary Effect of Power: How Perception of Power Affects Monetary Value Judgments in China and US," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 69-83, May.
  16. Ken-ichi Hashimoto, 2004. "Intergenerational Transfer and Effective Demand," Economics Bulletin, AccessEcon, vol. 5(1), pages 1-13.
  17. Shiyuan Pan & Mengbo Zhang & Heng-fu Zou, 2013. "The Effects of Patent Protection: A Growth Model with Status Preference," CEMA Working Papers 574, China Economics and Management Academy, Central University of Finance and Economics.
  18. Chang, Wen-ya & Hsieh, Yi-ni & Lai, Ching-chong, 2000. "Social status, inflation, and endogenous growth in a cash-in-advance economy," European Journal of Political Economy, Elsevier, vol. 16(3), pages 535-545, September.

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