Conspicuous Consumption, Inequality and Debt: The Nature of Consumption‐driven Profit‐led Regimes

This paper extends the theoretical concept of wage‐led and profit‐led demand regimes by incorporating relative consumption concerns. Specifically, it integrates the V eblenian concept of conspicuous consumption into the B haduri– M arglin model by assuming that relative consumption concerns matter primarily within the working class. If in such a framework the profit share increases and the corresponding decrease in workers' income is distributed unevenly, efforts to ‘keep up with the J oneses’ may increase consumption and, hence, lead to a consumption‐driven profit‐led regime .