ABSTRACT
The normality of household income distribution implies that growth of consumer demand inevitably has cyclical or semi-cyclical fluctuations. Therefore, each industry, as well as the whole economy, has its own cycle caused by the normality of household income distribution. The amplitude of the industrial cycle is greater than that of the consumer goods cycle, and the transformation of the industrial structure could change the shape of the economic cycle. Only when the new products resulting from enterprise innovation become new demand can they change the shapes of consumer goods and economic cycles. Reduction in income inequality will speed up the growth rate of demand for consumer goods in the growing and maturing stages, and then raise the economic growth rate. At the same time, reduction in income inequality will decrease the growth rate of the demand for consumer goods in the initial development stage, and thus depress the development of emerging industries and undermine long-term economic development. Keeping income inequality to a moderate level is the basic requirement for maintaining sustainable and rapid economic growth.
