Evidence of a Scitovsky Stagflation Thesis

This paper empirically analyzes a recent stagflation thesis developed by Tibor Scitovsky. Scitovsky's theory is based on Hirsch's division of the economy into material and positional sectors and the supposition that the positional economy is growing relative to the material economy. Results of this paper indicate that Scitovsky's thesis is based on a sound foundation. That is, the evidence produced in this paper cannot reject the hypothesis that the positional sector is growing more quickly than the material sector.