The rise of mass consumption societies

Matsuyama, Kiminori (2000) The rise of mass consumption societies. DEDPS (23). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.

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Abstract

This paper develops a model to understand mechanisms behind the rise of mass consumption societies. The development process depicted in the model follows the Flying Geese pattern, in which a series of industries takes off one after another. As productivity improves in these industries, each consumer good becomes affordable to an increasingly large number of households, which constantly expand the range of goods they consume. This in turn generates larger markets for consumer goods, which leads to further improvement in productivity. In order for such two-way causality to generate virtuous cycles of productivity gains and expanding markets, income distribution should be neither too equal nor too unequal. Some income inequality is needed for the economy to take off; too much equality means that the economy stagnates in a poverty trap. With too much inequality, the economy's development stops prematurely. The rise of a mass consumption society is thus an essential element for sustainable development

Item Type:	Monograph (Discussion Paper)
Official URL:	http://sticerd.lse.ac.uk
Additional Information:	© 2000 Kiminori Matsuyama
Divisions:	STICERD
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
Date Deposited:	08 Jul 2008 09:26
Last Modified:	11 Dec 2024 18:28
URI:	http://eprints.lse.ac.uk/id/eprint/6656

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