Spirit of Capitalism and Conspicuous Consumption with Social Status in a Neoclassical Growth Trade Model

This study deals with dynamic interactions among social status, conspicuous consumption, spirit of capitalism, global growth, trade patterns, and inequalities in income and wealth between countries. The paper constructs a multi-country growth model with endogenous physical capital, wealth accumulation and social status. The modelling of social status is influenced by the ideas related to economic growth and social status in the literature of economic growth. This study analyzes the role of conspicuous consumption by assuming that social status is enhanced by more consumption and the role of the spirit of capitalism (of some goods) by assuming that social status is enhanced by more wealth. The global economic system consists of any number of countries and each country has one capital goods sector and one consumer goods sector. This study applies an alternative utility function proposed by Zhang to analyze household behavior. The countries differ in preferences, spirits of capitalisms, and productivities. We show that the dynamics of -country world economy is described by differential equations. We simulate the motion of the model with three countries and carry out comparative dynamic analysis with regard to some parameters.

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Business Cycles with Spirit of Capitalism and Conspicuous Consumption in a Multi-Country Growth Model

International Business Research ◽

10.5539/ibr.v10n8p58 ◽

2017 ◽

Vol 10 (8) ◽

pp. 58

Author(s):

Wei-Bin Zhang

Keyword(s):

Social Status ◽

Growth Model ◽

Conspicuous Consumption ◽

Wealth Accumulation ◽

Trade Patterns ◽

Economic Growth Model ◽

Endogenous Variables ◽

Spirit Of Capitalism ◽

Global Economic Growth

This paper generalizes the global economic growth model with spirit of capitalism, social status, and conspicuous consumption recently proposed by Zhang (2016). Zhang’s model examines the role of spirit of capitalism, social status, and conspicuous consumption in national and international economic development, trade patterns, and distribution of income and wealth between countries. The multi-country growth model treats social status and wealth accumulation as endogenous variables. This paper generalizes the model by Zhang through making all exogenous constant parameters as exogenous time-dependent parameters. We demonstrate how the system reacts to exogenous periodic perturbations.

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Economic Growth with Social Status, Spirit of Capitalism, and Conspicuous Consumption

Shanlax International Journal of Economics ◽

10.34293/economics.v9i1.3500 ◽

2020 ◽

Vol 9 (1) ◽

pp. 1-10

Author(s):

Wei-Bin Zhang

Keyword(s):

Economic Growth ◽

Social Status ◽

Growth Model ◽

Open Economy ◽

Wealth Distribution ◽

Small Open Economy ◽

Conspicuous Consumption ◽

Wealth Accumulation ◽

Spirit Of Capitalism ◽

Income And Wealth Distribution

The purpose of this study is to introduce social status, conspicuous consumption, and spirit of capitalism into neoclassical growth model. This paper studies a dynamic interdependence between economic growth, economic structural change, income and wealth distribution, social status, conspicuous consumption, and spirit of capitalism in a small-open economy. We build a heterogeneous-households growth model with endogenous wealth accumulation and social status. The dynamics of J-households economy is described by J differential equations. We simulate the motion of the model with three groups of households. We carry out comparative dynamic analysis with regard to some parameters.

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Threshold effects of inequality on economic growth in the US states: the role of human capital to physical capital ratio

Applied Economics Letters ◽

10.1080/13504851.2019.1696449 ◽

2019 ◽

Vol 27 (19) ◽

pp. 1546-1551

Author(s):

Oğuzhan Çepni ◽

Rangan Gupta ◽

Zhihui Lv

Keyword(s):

Economic Growth ◽

Human Capital ◽

Physical Capital ◽

Threshold Effects ◽

Us States ◽

The Us

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Capital accumulation and growth in Hungary, 1924–2006

Acta Oeconomica ◽

10.1556/aoecon.61.2011.2.3 ◽

2011 ◽

Vol 61 (2) ◽

pp. 143-164 ◽

Cited By ~ 10

Author(s):

B. Leeuwen ◽

P. Földvári

Keyword(s):

Economic Growth ◽

Human Capital ◽

Capital Accumulation ◽

Physical Capital ◽

Volume Index ◽

Growth Accounting ◽

Simple Method ◽

Long Run ◽

Over Time

The objective of this paper is to analyse the role of both human and physical capital in economic growth in Hungary during the 20th century by extending the already available data on physical and human capital. Besides the standard measure for the volume of human capital, we develop a simple method to estimate the value of the human capital stock in Hungary between 1924 and 2006. While the volume index slowly grows over time, the value of human capital shows a decline during the late socialist period. Applying the value of human capital in a growth accounting analysis, we find that the Solow residual has no long-run effect on economic growth anymore.

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The Role of Time Preferences in Explaining the Long-Term Pattern of International Trade

Global Economy Journal ◽

10.1515/gej-2014-0035 ◽

2014 ◽

Vol 15 (1) ◽

pp. 83-106 ◽

Cited By ~ 1

Author(s):

Marian Leimbach ◽

Lavinia Baumstark ◽

Gunnar Luderer

Keyword(s):

Economic Growth ◽

International Trade ◽

Current Account ◽

Empirical Data ◽

Time Preference ◽

Time Preferences ◽

Trade Patterns ◽

Applied Model ◽

Trade Model

Globalization is accompanied by increasing current account imbalances. They can undermine the positive impacts of increasing international cooperation and trade on economic growth. By applying an economic growth model that requests for long-term compensation of short-term current account deficits, we derive patterns of international trade. Model output, however, is challenged by empirical data – which is related to the Lucas Paradox. This paper demonstrates how, based on the assumption of differentiated time preferences, model results and empirical data are reconciled with each other. The method presented here yields an indirect estimate of the rates of time preference across regions. Our results suggest that the time preference rate is low in emerging Asian countries, while the USA and Europe are characterized by above world-average rates. Based on the applied model that differentiates between trade in energy resources and a composite good, simulated trade patterns of these three world regions significantly differ from each other and also from trade patterns that occur in resource exporting countries.

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ON THE (NONMONOTONIC) RELATION BETWEEN ECONOMIC GROWTH AND FINANCE

Macroeconomic Dynamics ◽

10.1017/s1365100518000305 ◽

2018 ◽

Vol 24 (1) ◽

pp. 93-112 ◽

Cited By ~ 3

Author(s):

Alberto Bucci ◽

Simone Marsiglio ◽

Catherine Prettner

Keyword(s):

Economic Growth ◽

Financial Development ◽

Capital Investment ◽

Nonlinear Models ◽

Physical Capital ◽

Long Run ◽

Financial Depth ◽

Short Run ◽

Per Capita

We analyze the simplest possible model of endogenous growth to account for the role of financial development. In our setting, financial development affects productivity and determines the amount of resources subtracted to capital investment. We show that under very general assumptions, the relation between economic growth and financial depth is nonmonotonic, and eventually bell-shaped. We empirically assess our results in a framework that allows to distinguish between long-run and short-run effects. We establish a cointegrating relation and derive the long-run elasticities of per capita gross domestic product (GDP) with respect to employment, the physical capital stock, and financial depth–relying on linear as well as nonlinear models for the finance-growth nexus. We employ the results of the first step estimation to specify an error–correction model and find that there is strong evidence for a nonlinear relationship between financial depth and per capita GDP, consistently with what was predicted by our theoretical model.

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Total Factor Productivity Growth and the Role of Externalities

National Institute Economic Review ◽

10.1177/002795019716200108 ◽

1997 ◽

Vol 162 ◽

pp. 99-111 ◽

Cited By ~ 15

Author(s):

Nicholas Oulton

Keyword(s):

Economic Growth ◽

Total Factor Productivity ◽

Productivity Growth ◽

Physical Capital ◽

Total Factor Productivity Growth ◽

Growth Accounting ◽

Factor Productivity ◽

New Evidence

This paper argues that the greater part of economic growth can be accounted for by the accumulation of human and physical capital. The role of externalities is relatively small. This view is defended by reviewing the most sophisticated growth accounting studies and also by presenting some new evidence on the growth of total factor productivity in 53 countries over the period 1965 to 1990.

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The role of social status and testosterone in human conspicuous consumption

Scientific Reports ◽

10.1038/s41598-017-12260-3 ◽

2017 ◽

Vol 7 (1) ◽

Cited By ~ 5

Author(s):

Yin Wu ◽

Christoph Eisenegger ◽

Niro Sivanathan ◽

Molly J. Crockett ◽

Luke Clark

Keyword(s):

Social Status ◽

Conspicuous Consumption

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The Long Term Impact of Health on Economic Growth in Pakistan

The Pakistan Development Review ◽

10.30541/v47i4iipp.487-500 ◽

2008 ◽

Vol 47 (4II) ◽

pp. 487-500 ◽

Cited By ~ 19

Author(s):

Naeem Akram ◽

Ihtsham Ul Haq Padda ◽

Mohammad Khan

Keyword(s):

Economic Growth ◽

Human Capital ◽

Technical Change ◽

Physical Capital ◽

Per Capita ◽

Long Term Impact ◽

Sustainable Economic Growth ◽

The Impact

Human capital plays pivotal role for sustainable economic Growth. As different growth theories suggest the role of human capital as a significant for growth process. The concept of human capital in economic literature defined broadly by including education, health, training, migration, and other investments that enhance an individual’s productivity. However, the growth economists that have incorporated human capital in the growth studies, paid greater attention on analysing the impact of education on economic growth, while ignoring the role of health human capital. It is only in very recent times that studies have started looking at health and tried to estimate the relationship between health status and economic growth. There exists a two-way relationship between improved health and economic growth. Health and other forms of human and physical capital increases the per capita GDP by increasing productivity of existing resources coupled with resource accumulation and technical change. Furthermore, some part of this increased income is spent on investment in human capital, which results in further per capita growth. According to Fogel (1994), approximately one third of GDP of Britain between 1790 and 1980 is the outcome of improvements in health especially improvement in nutrition, public health, and medical care facilities and these improved health facilities should be considered as labour enhancing technical change.

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Education And Economic Growth In Korea, 1966 To 1997

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v16i4.2056 ◽

2011 ◽

Vol 16 (4) ◽

Author(s):

Namchul Lee

Keyword(s):

Economic Growth ◽

Time Series ◽

Human Capital ◽

Time Series Data ◽

Physical Capital ◽

Series Data ◽

Korean Society ◽

Augmented Dickey Fuller ◽

Aggregate Production Function

This paper examines the aggregate production function for Korea, using direct estimates of human capital.  The contribution of this study possibly provides be affirmation of the myriad role education plays in Korean society, including that of economic growth.  I have used the Cobb-Douglas production and time series data of physical capital, labor force, and human capital measurements. In terms of an estimation technique, I have used modern time series methods specifically designed to deal with covariance stationary based on the Augmented Dickey-Fuller (ADF) unit root tests.  To date, these techniques have not been frequently used to explore the nature of quantity and quality human capital variables, physical capital, and labor variables.  This study has led me to the conclusion that the level of human capital is a significant determinant for economic growth.  The coefficient for the quality of human capital stock, however, I found to be negative and significant.  These measures ignore the important role of training and learning through practice, and the productivity effect of the educational curriculum.

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