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Emulation and Consumer Debt: Implications of Keeping-Up with the Joneses


  • Yun Kim

    () (Department of Economics, Trinity College)


We develop a stock-flow consistent neo-Kaleckian macro model which incorporates consumption emulation and consumer debt accumulation. Income distributional dimension is also incorporated via the conflict-claims approach of inflation. Using this model, we investigate the macroeconomic effects of lower income group's consumption emulation of higher income group through borrowing. We find that emulation could expand aggregate demand and hence generate a faster economic growth. Our results also indicate that consumption emulation could be a source of widening income inequality.

Suggested Citation

  • Yun Kim, 2012. "Emulation and Consumer Debt: Implications of Keeping-Up with the Joneses," Working Papers 1208, Trinity College, Department of Economics.
  • Handle: RePEc:tri:wpaper:1208

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    References listed on IDEAS

    1. Samuel Bowles & Yongjin Park, 2005. "Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?," Economic Journal, Royal Economic Society, vol. 115(507), pages 397-412, November.
    2. Eckhard Hein, 2006. "Interest, Debt and Capital Accumulation—A Kaleckian Approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(3), pages 337-352.
    3. Cynamon Barry Z. & Fazzari Steven M., 2008. "Household Debt in the Consumer Age: Source of Growth--Risk of Collapse," Capitalism and Society, De Gruyter, vol. 3(2), pages 1-32, October.
    4. Amitava Krishna Dutt, 2006. "Maturity, Stagnation And Consumer Debt: A Steindlian Approach," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 339-364, July.
    5. Marc Lavoie, 1992. "Foundations of Post-Keynesian Economic Analysis," Books, Edward Elgar Publishing, number 275.
    6. Amitava Krishna Dutt, 2008. "The Dependence Effect, Consumption and Happiness: Galbraith Revisited," Review of Political Economy, Taylor & Francis Journals, vol. 20(4), pages 527-550.
    7. Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 395-412, September.
    8. Sébastien Charles, 2008. "Corporate debt, variable retention rate and the appearance of financial fragility," Cambridge Journal of Economics, Oxford University Press, vol. 32(5), pages 781-795, September.
    9. Robert A. Blecker, 2010. "Open economy models of distribution and growth," Working Papers 2010-03, American University, Department of Economics.
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    Cited by:

    1. Mark Setterfield & Yun K. Kim & Jeremy Rees, 2016. "Inequality, Debt Servicing and the Sustainability of Steady State Growth," Review of Political Economy, Taylor & Francis Journals, vol. 28(1), pages 45-63, January.
    2. Mark Setterfield & Yun K. Kim, 2016. "Household Borrowing and the Possibility of ``Consumption-Driven, Profit-Led Growth’’," Working Papers 2016_01, University of Massachusetts Boston, Economics Department.

    More about this item


    consumer debt; emulation; income distribution; growth;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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