Consumption structure and macroeconomics. Structural change and the relationship between inequality and growth. (Q2571103)

In a market economy, the individual needs and desires to determine which goods are developed and finally produced. A priori, the value of a product does not hinge on the costs incurred to produce it, but on the consumers' willingness to pay. The aim of the book is to analyse how the consumption structure changes when average income rises or incomes are redistributed across individuals holding aggregate income constant. The analysis is structured in five chapters. In Chapter 2, a general framework of non-homothetic and hierarchic preferences is developed, different special cases of which are used throughout the rest of the book. In Chapter 3, the interaction between endogenous growth and demand driven structural change is examined. Chapter 4 is devoted to the analysis of the relationship between inequality and demand structure in an endogenous growth model when consumers have hierarchic preferences. To study the relationship between inequality and product market power in detail, a static model with less restrictions on product market demands is then developed in Chapter 5.