Abstract
This study considers whether the growth models with consumption satiation shown by Pasinetti and Andersen are consistent with empirical studies. Andersen’s numerical example is expanded by introducing product innovation, suggesting a necessary condition for continuous growth.
Chapter 1 shows how a horizontal approach is supported by empirical studies and explains why a horizontal approach allowing for heterogeneity among goods/sectors is necessary for the growth model, and why restriction of exogenous demand, the so-called “demand satiation”, should be introduced.
Chapter 2 considers the implications of Andersen’s numerical example through empirical studies. This approach indicates that a change in income share of goods/sectors (“structural change”) and an increase in aggregated consumption demand through the creation of independent goods/sectors are necessary for continuous growth.
Chapter 3 considers the economic dynamics in Andersen’s approach and the necessary condition of continuous growth. The numerical example is expanded by introducing product innovation and the results indicate that a necessary condition for continuous growth is the arrival of product innovation at an increasing tempo.
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Matsumae, T. A Study on the Consistency between Empirical Studies and Growth Models with Demand Satiation and Structural Change. Evolut Inst Econ Rev 1, 197–220 (2005). https://doi.org/10.14441/eier.1.197
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DOI: https://doi.org/10.14441/eier.1.197