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The effect of demand-driven structural transformations on growth and technological change

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  • André Lorentz

    ()

  • Tommaso Ciarli

    ()

  • Maria Savona

    ()

  • Marco Valente

    ()

Abstract

The paper analyses the effect of the dynamics of consumption preferences on the dynamics of macro–economic growth. We endogenously derive micro–dynamics of consumption behavior as a result of the increase in the number of income classes. The different degrees of inertia in the adjustment of consumption levels to income changes affect firm selection and the dynamics of market structure, which is ultimately responsible for different regimes of macro–economic growth. We find, first, that higher heterogeneity in consumption preferences amplifies and accelerates market dynamics, leading to a swift shift from a Malthusian to a Kaldorian growth pattern. Second, consumption smoothing mainly affects the timing of such a take–off. Inertia in consumption delays the occurrence of a Kaldorian engine for growth. Copyright Springer-Verlag Berlin Heidelberg 2016

Suggested Citation

  • André Lorentz & Tommaso Ciarli & Maria Savona & Marco Valente, 2016. "The effect of demand-driven structural transformations on growth and technological change," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 219-246, March.
  • Handle: RePEc:spr:joevec:v:26:y:2016:i:1:p:219-246
    DOI: 10.1007/s00191-015-0409-5
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    Citations

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    Cited by:

    1. Zakaria Babutsidze & Maurizio Iacopetta, 2016. "Innovation, growth and financial markets," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 1-24, March.
    2. Rengs, Bernhard & Scholz-Waeckerle, Manuel, 2017. "Consumption & Class in Evolutionary Macroeconomics," MPRA Paper 80021, University Library of Munich, Germany.
    3. Loet Leydesdorff & Gaston Heimeriks & Daniele Rotolo, 2016. "Journal portfolio analysis for countries, cities, and organizations: Maps and comparisons," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 67(3), pages 741-748, March.
    4. Stapleton, Lee & Sorrell, Steve & Schwanen, Tim, 2016. "Estimating direct rebound effects for personal automotive travel in Great Britain," Energy Economics, Elsevier, vol. 54(C), pages 313-325.
    5. Tommaso Ciarli & Andre Lorentz & Marco Valente & Mario Savona, 2017. "Structural Changes and Growth Regimes," SPRU Working Paper Series 2017-12, SPRU - Science and Technology Policy Research, University of Sussex.
    6. Dario Guarascio & Mario Pianta & Francesco Bogliacino, 2016. "Export, R&D and new products. a model and a test on European industries," Journal of Evolutionary Economics, Springer, vol. 26(4), pages 869-905, October.
    7. Giovanni Dosi & Andrea Roventini & Emanuele Russo, 2017. "Endogenous growth and global divergence in a multi-country agent-based model," LEM Papers Series 2017/32, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    8. Ciarli, Tommaso & Valente, Marco, 2016. "The complex interactions between economic growth and market concentration in a model of structural change," Structural Change and Economic Dynamics, Elsevier, vol. 38(C), pages 38-54.
    9. Paola D’Orazio & Marco Valente, 2018. "Do Financial Constraints Hamper Environmental Innovation Diffusion? An Agent-Based Approach," SPRU Working Paper Series 2018-10, SPRU - Science and Technology Policy Research, University of Sussex.
    10. Reto Foellmi & Josef Zweimüller, 2017. "Is inequality harmful for innovation and growth? Price versus market size effects," Journal of Evolutionary Economics, Springer, vol. 27(2), pages 359-378, April.
    11. repec:spr:joevec:v:27:y:2017:i:3:d:10.1007_s00191-017-0498-4 is not listed on IDEAS

    More about this item

    Keywords

    Consumption; Structural change; Income distribution; Technological change; Growth; O41; L16; C63; O14;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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