Positional Goods, Conspicuous Consumption, and the International Demonstration Effect Reconsidered
Author(s)
James, Jeffrey
Abstract
Ragnar Nurkse’s hypothesis of an international demonstration effect namely, that industrial countries’ consumption standards exert a powerful attraction on poorer countries is frequently cited in development literature. This chapter argues that Nurkse framed the issue too narrowly, particularly in his attempt to disassociate the demonstration effect from Thorstein Veblen’s analysis of conspicuous consumption. A broader understanding is needed, drawing on the work of a number of economists to show that the related issues raised by Veblen and Nurkse have important implications for developing economies.
