Our results demonstrate that borrowing and emulation transform the relationship between distribution and growth, giving rise to the possibility of a “consumption-driven, profit-led” growth regime (Kapeller and Schütz, 2015) and what we call the “paradox of inequality.” A key conclusion is that the wage-or -profit led characteristics of the growth process, rather than being invariant, can be altered by social constructs such as borrowing and consumption norms that change over time.
Household Borrowing and the Possibility of “Consumption- Driven, Profit-Led Growth”
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- WP39-Setterfield (pdf, 567.33 KB)