Conspicuous consumption, economic growth, and taxation

Commodities do not only serve the purpose of satisfying direct needs in the production and consumption process. Some of them are also used to display social status and to affect the position of an individual in society. The paper looks at status-seeking activities in an economic-growth context. Two questions are asked. Does status-seeking behavior accelerate economic growth? And: should capital accumulation be subsidized to correct for the status externality? The answers to both questions are ambiguous.