What makes a novel "literary fiction"?

Narrator's friend Kalaj in Andre Aciman's Harvard Square is the Id to narrator's superego, the Zorba to his (?), the hip to his Square - in other words, not exactly his opposite but his antithesis and in some ways his ideal. The narrator does, about 80 pp. in, say that the would really like to be Kalaj - and on the surface who wouldn't?, he gets all the girls while the narrator lives his monkish little scholarly life. But then the narrator gets a girl, too - girl in next apartment unit basically flings herself at his feet - this does not happen in life, only in (male) novels, but OK - and maybe he is becoming a bit like Kalaj. But to what end? He's clearly meant to be an intellectual, and we know from the framing chapter that he's a well-educated man with at least one high-achieving kid and he has strong, positive memories of his time at Harvard - so he never becomes much like Kalah, at least not for long. So the issue with the novel is and will be: what effect do these characters have on one another? Do either of them change, learn, grow? Do they influence each other, like planetary forces? Or do they just remain in stasis, opposites both attracting and repelling? The success of the novel hinges on these questions. It is one thing to establish in literature a situation, a character, a relationship. It is another thing to have these character interact and grow and change over time - that's true literary fiction, a much higher bar, and much more rarely achieved.