This book offers a novel perspective that allows to incorporate changing consumption and production structure into models of economic growth. Starting from the empirical observation that income and consumption structure are closely related, it develops a tractable theoretical framework which...

We study a model of endogenous growth where firms invest both in product and process innovations. Product innovations (that open up completely new product lines) satisfy the advanced wants of the rich. Subsequent process innovations (that decrease costs per unit of quality) transform the...

We utilize Schmookler's (1966) concept of demand-induced invention to study the role of income inequality in an endogenous growth model. As rich consumers can satisfy more wants than poor consumers, both prices and market sizes for new products, as well as their evolution over time, are...

This book offers a novel perspective that allows to incorporate changing consumption and production structure into models of economic growth. Starting from the empirical observation that income and consumption structure are closely related, it develops a tractable theoretical framework which...