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Fashion and Business Cycles with Snobs and Bandwagoners in a Multi-Sector Growth Model

Author

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, Japan)

Abstract

This paper generalizes the dynamic growth model with interactions between fashion, economic growth and income and wealth distribution recently built by Zhang (2016). The modelling of fashion and preference change is inspirited by the economic model of fashion recently published by Giovinazzo and Naimzada (2015). This study introduces fashion into neoclassical growth theory. The original model is based on some ideas in the literature of economics of fashion. This study generalizes Zhang’s model by making all the time-independent parameters as time-dependent parameters. We simulate the motion of the economic system. We carry out comparative dynamic analysis with regard to periodic perturbations in some parameters. We show how exogenous period changes in these parameters lead to business cycles. Classification JEL: N13; E25; E32; O41

Suggested Citation

  • Wei-Bin Zhang, 2017. "Fashion and Business Cycles with Snobs and Bandwagoners in a Multi-Sector Growth Model," Journal of Business, LAR Center Press, vol. 2(3), pages 1-13, May.
    • Handle: RePEc:lrc:larjob:v:2:y:2017:i:3:p:1-13
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    References listed on IDEAS

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    1. Abel, Andrew B, 1990. "Asset Prices under Habit Formation and Catching Up with the Joneses," American Economic Review, American Economic Association, vol. 80(2), pages 38-42, May.
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    3. Caulkins, Jonathan P. & Hartl, Richard F. & Kort, Peter M. & Feichtinger, Gustav, 2007. "Explaining fashion cycles: Imitators chasing innovators in product space," Journal of Economic Dynamics and Control, Elsevier, vol. 31(5), pages 1535-1556, May.
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    14. Wei-Bin Zhang, 2016. "Fashion with Snobs and Bandwagoners in a Three-Type Households and Three-Sector Neoclassical Growth Model," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 11(2), pages 1-19, Julio-Sep.
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    Cited by:

    1. Ahmad Naimzada & Marina Pireddu, 2019. "A general equilibrium evolutionary model with generic utility functions and generic bell-shaped attractiveness maps, generating fashion cycle dynamics," Working Papers 401, University of Milano-Bicocca, Department of Economics, revised Mar 2019.
    2. Ahmad Naimzada & Marina Pireddu, 2020. "A general equilibrium evolutionary model with two groups of agents, generating fashion cycle dynamics," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 43(1), pages 155-185, June.

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    Keywords

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    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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