A reformulation of Demand-Led Growth: Transformational Growth and the Consumption-Growth Relationship

Building on the theory of Transformational Growth, the paper presents a conceptual framework that brings together autonomous investment, structural change and demand structure, therefore focusing on the Consumption-Growth relationship. In particular, the structural dynamics of market creation is the result of the effort to build the market by firms aiming at exploiting the potential implicit in the development of needs. This contributes to the theory of demand-led growth a theory of the growth of demand, therefore explaining why demand matters also in the long run.