Location of Repository

Structural change in a multi-sector model of growth

By L. Rachel Ngai and Christopher Pissarides

Abstract

We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of structural change, characterized by sectoral labor reallocation, and balanced aggregate growth. The conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists. Per capita output grows at the rate of labor-augmenting technological progress in the capital-producing sector and employment moves to low-growth sectors. In the limit all employment converges to two sectors, the slowest-growing consumption-goods sector and the capital-goods sector

Topics: HB Economic Theory
Publisher: The Institute for the Study of Labor (IZA)
Year: 2005
OAI identifier: oai:eprints.lse.ac.uk:4656
Provided by: LSE Research Online

Suggested articles

Preview

Citations

  1. (1961). Capital Accumulation and Economic Growth.” In The Theory of Capital,e d .F . A .K u t za n dD . C .H a g u e .N e wY o r k :S t .M a r t i n s .
  2. (1980). Economic Growth and Structural Change in the Advanced Countries,” in Western Economies in Transition. Eds.: I. Leveson
  3. (2004). Economic Growth.S e c o n de d i t i o n . doi
  4. (2004). Intersectoral Labor Mobility and the Growth of the Service Sector”. Econometrica,f o r t h c o m i n g doi
  5. (1967). Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis.” American Economic Review 57: 415-26. obtain when the ranking of the historical TFP growth rates is agriculture-manufacturing-services. Maddison
  6. (1966). Modern Economic Growth: Rate, Structure, and Spread.N e wH a v e n , Conn.: doi
  7. (2001). Must the Growth Rate Decline? Baumol’s Unbalanced Growth Revisited.” doi
  8. (2000). Structural Change and Economic Growth”. doi
  9. (1997). The Productivity Slowdown: Is a Growing Unmeasurable Sector the Culprit?” doi
  10. (1983). The Share of Service in Economic Growth”. Global Econometrics: Essays in Honor of Lawrence R. Klein,E d i t e d by
  11. (2001). The U.S. Structural Transformation and Regional Convergence: A Reinterpretation.” J o u r n a lo fP o l i t i c a lE c o n o m y 109: doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.