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A Reformulation of Demand-Led Growth: Transformational Growth and the Consumption-Growth Relationship

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  • Davide Gualerzi

Abstract

Demand-led growth is an alternative to the dominant supply-determined approach to growth theory. The main open problem is to show in which way demand matters also in the long run. For that reason it is of particular relevance the question of the growth of demand, therefore of the rise of new markets, and its relationship to structural change. Building on the theory of Transformational Growth, the paper presents a conceptual framework that brings together autonomous investment, structural change and demand structure, therefore focusing on the Consumption-Growth relationship. In particular, the structural dynamics of market creation is the result of the effort to build the market by firms aiming at exploiting the potential implicit in the development of needs.

Suggested Citation

  • Davide Gualerzi, 2007. "A Reformulation of Demand-Led Growth: Transformational Growth and the Consumption-Growth Relationship," Bulletin of Political Economy, Bulletin of Political Economy, vol. 1(2), pages 109-128, December.
    • Handle: RePEc:awu:journl:v:1:y:2007:i:2:p:109-128
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