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Understanding the demand-side of economic change: a contribution to formal evolutionary theorizing

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  • Francisco Fatas-Villafranca
  • Dulce Saura-Bacaicoa

Abstract

An outstanding fact of capitalist change in the last few centuries is the ongoing emergence of new consumption alternatives which accompany income and productivity growth in expanding economies. Far from satiating consumers, exponential economic growth seems to stimulate human desires by providing novelty and variety embodied in a persuasive flow of unsettling goods. Although this is a well-known fact characteristic of capitalist change, little attention has been paid by modern growth theorists to the understanding of demand-side phenomena related to the increasing significance of consumption activities in our societies. Against this background, in this article, we show that as soon as we start drawing the demand-side contour of economic change, new phenomena appear which enrich our understanding of economic growth and structural change. By using 'replicator dynamics' systems, consumption dynamics are formally linked to the ongoing generation of innovations in capitalist economies. Certain emergent properties concerning economic growth and structural change and several policy implications follow.

Suggested Citation

  • Francisco Fatas-Villafranca & Dulce Saura-Bacaicoa, 2004. "Understanding the demand-side of economic change: a contribution to formal evolutionary theorizing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(8), pages 695-716.
    • Handle: RePEc:taf:ecinnt:v:13:y:2004:i:8:p:695-716
    DOI: 10.1080/10438590410001686789
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    References listed on IDEAS

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    1. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    2. Pasinetti,Luigi, 1993. "Structural Economic Dynamics," Cambridge Books, Cambridge University Press, number 9780521432825.
    3. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    4. Gerald Silverberg & Luc Soete (ed.), 1994. "The Economics Of Growth And Technical Change," Books, Edward Elgar Publishing, number 408.
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    1. Francisco J. Santos-Arteaga & Debora Di Caprio & Madjid Tavana & Aidan O'Connor, 2017. "Formalising The Demand For Technological Innovations: Rational Herds, Market Frictions And Network Effects," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-43, February.
    2. Francesco Quatraro, 2009. "Innovation, structural change and productivity growth: evidence from Italian regions, 1980--2003," Cambridge Journal of Economics, Oxford University Press, vol. 33(5), pages 1001-1022, September.
    3. M. Joseph Sirgy & Eda Gurel-Atay & Dave Webb & Muris Cicic & Melika Husic-Mehmedovic & Ahmet Ekici & Andreas Herrmann & Ibrahim Hegazy & Dong-Jin Lee & J. Johar, 2013. "Is Materialism All That Bad? Effects on Satisfaction with Material Life, Life Satisfaction, and Economic Motivation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(1), pages 349-366, January.

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