ABSTRACT
This chapter aims to examine the effects of changes in consumption levels on output and growth in terms of models which take aggregate demand seriously both for the short-run determination of output and employment and also for long-run growth. It presents a simple version of the post-Keynesian growth model and discusses its relevance. The chapter explores a modification of the simple model that introduces consumer borrowing and debt. It describes the implications of increases in conspicuous consumption in the short run and the long run. The impact of consumer debt on growth has also been almost completely neglected in the post Keynesian literature—an omission that seems all the more surprising, given the importance attached to aggregate demand issues in the long run in the post-Keynesian literature. The chapter also explores the relationship between conspicuous consumption and economic growth.
