Population-ageing, structural change and productivity growth

Population-ageing is one of the traditional topics of development and growth theory and a key challenge to most modern societies. We focus on the following aspect: Population-ageing is associated with changes in demand-structure, since demand-patterns change with increasing age. This process induces structural changes (factor-reallocations across technologically heterogeneous sectors) and, thus, has impacts on average productivity growth. We provide a neoclassical multi-sector growth-model for analyzing these aspects and elaborate potential policy-impact channels. We show that ageing has permanent and complex/multifaceted impacts on the growth rate of the economy and could, therefore, be an important determinant of long-run GDP-growth.population-ageing; demand shifts; reallocation of factors; cross-sector technology-disparity; GDP-growth; multi-sector growth models; neoclassical growth models; structural change

Structural Change and Economic Growth: Analysis within the "Partially Balanced Growth-Framework”

The term “structural change” refers to changes in the sector-structure of an economy, where “sectors” are some theoretical “groups” of goods and services (e.g. agricultural sector, manufacturing sector, services sector). In fact, structural change is one of the most striking empirical facts of the development process; most prominent examples of structural change are “industrialization” and “transition to a services economy”. Even more importantly, it is well known that structural change has some key impacts on economy and society, especially on (aggregate) economic growth. Although structural change has been known for a long time, structural change theory has not been a mainstream research topic, especially not in the growth theory. Some new research introduced a new approach to studying structural change, which is more in line with the mainstream growth theory. I name this approach “partially balanced growth school” (“PBGP-school”). Broadly speaking, this new school of structural change can be characterized upon two attributes (a mathematical one and a theoretical one): (1) The concept of “partially balanced growth” is used to study the differential-equation-systems of the theoretical models. (2) The modelling framework may be regarded as “neoclassical” in many ways. I elaborate mathematical and theoretical foundations of the PBGP-school; especially, I discuss the usage of partially balanced growth paths in structural change modelling and the integration of structural change into the mainstream neoclassical growth model (Ramsey-Cass-Koopmans-model). I systematize the literature on structural-change-modelling and integrate/classify the new PBGP-school into this scheme. Finally, I use the concepts of the PBGP-school for analysing some actual economic topics related to structural change and (long-run) economic growth. Especially, by using the PBGP-methods I analyse the Kuznets-Kaldor-puzzle, the impacts of Offshoring on real GDP-growth and the effects of demand-shifts associated with population ageing. In fact, my work implies that the methods of the PBGP-school seem to be valuable tools for analysing structural change. Furthermore, as I hope, my work provides some new and interesting insights into structural change and economic growth. In Chapter I, I provide an introduction to my research. Subsequently in Chapters II and III, I explain and discuss the mathematical and modelling foundations of my research. Chapter IV includes a systematization of structural-change-modelling-literature and the classification of the PBGP-school and of my research. In Chapter V, I present my efforts on modelling the Kuznets-Kaldor-Puzzle, Offshoring and Ageing by using the PBGP-methods. Finally, in Chapter VI there is a summary of my work

The Kuznets-Kaldor-Puzzle and Neutral Cross-Capital-Intensity Structural Change

The Kuznets-Kaldor stylized facts are one of the most striking empirical observations about the development process in the industrialized countries: While massive factor reallocation across technologically distinct sectors takes place, the aggregate ratios of the economy are quite stable. This implies that cross-technology factor reallocation has a relatively weak impact on the aggregates, which is a puzzle from a theoretical point of view. We provide a model that can explain this puzzle. Furthermore, we show by empirical evidence that this model is in line with 55% of structural change

Positivistic models of long-run labor allocation dynamics

We formulate economic laws of long-run labor re-allocation across agriculture, manufacturing, and services based on empirical evidence and derive the implications of these laws for the future (transitional and limit) labor allocation dynamics in developed and developing countries. Our approach for deriving these predictions is positivistic in the sense that we try to derive the direct implications of the laws, i.e. we try to minimize the dependence of our predictions on theoretical/ideological arguments. Due to this fact and because the economic laws are qualitative statements, our modeling approach requires the use of geometrical/axiomatic dynamic modeling techniques, set theory and logic

Structural Change, Aggregate Growth And Government Services

Recent literature studies structural change and aggregate dynamics in neoclassical multi-sector growth models. A central aspect of this literature is the explanation of Kaldor-Kuznets-stylized-facts , which state that massive structural change takes place while aggregate-dynamics are relatively stable in the long-run. We present a growth model analysing the role of government in structural change and aggregate growth. We show that, besides distortionary effects on the sector structure, the provision of government services has an impact on the intertemporal elasticity of substitution of the representative household and, thus, on aggregate dynamics. These results can be used to explain the Kaldor-Kuznets-facts

Empirical evidence on the topological properties of structural paths and some notes on its theoretical explanation

The mathematical literature has developed a large pool of topological concepts and theorems for dynamic systems analysis. The aim of our paper is to make a first step towards the application of these concepts and theorems in the analysis of (long-run) structural change (in the three-sector framework). Our approach focuses on two of the most basic topological notions, namely intersection and self-intersection of trajectories on a two-dimensional domain. We discuss the mathematical foundations of the application of these concepts in structural change analysis, use them for analyzing empirical data, and elaborate new stylized facts stating that different countries’ structural change trajectories are (non-self-)intersecting. Finally, we discuss briefly the theoretical explanations of (non-self-)intersection and a wide range of new research topics relating to (a) the topological classification and comparison of models and evidence and (b) the application of (further) topological concepts in standard branches of growth and development theory

A contribution to the qualitative, interdisciplinary modeling of environmental development

We suggest a simple, interdisciplinary, qualitative, system-theoretical model of long-run environmental development, where the dynamics of environmental quality are determined by the interactions across the political, economic, ecological/natural, and socio-cultural systems. The resulting model is a self-regulating feedback-loop system and can be used to explain the existence and the characteristics of different empirically observable economic/societal development stages (pollution phase and ecological phase) and environmental and economic policy-regime switches consistent with empirical evidence

Empirical evidence on the geometrical properties of structural change trajectories

We study the long-run labor reallocation dynamics in the three-sector framework relating to agriculture, manufacturing, and services. In particular, we depict the labor reallocation data provided by Maddison (1995) and WorldBank on standard simplexes, study the geometrical properties of the implied vector field, and derive the geometrical properties of stylized labor reallocation trajectories. Moreover, we discuss how these properties can be explained by the standard structural change literature and used for structural change analysis and prediction

On the system-theoretical foundations of non-economic parameter constancy assumptions in economic growth modeling

In general, positive/quantitative growth models assume that (some of) the model parameters that are determined in non-economic systems are exogenous and constant. Such non-economic parameter constancy assumptions (abbr. ‘NEPCAs’) are not necessarily consistent with the empirical evidence on significant cross-system interactions and, in particular, long-run interactions between the economic system and the non-economic systems (e.g. socio-cultural, political, and ecological system). We derive the system-theoretical/mathematical conditions under which NEPCAs are good approximations of cross-system interactions in economic growth models: we (a) discuss the standard types of dynamic equilibrium and the problems that arise when using them to justify NEPCAs in economic long-run models (in presence of cross-system interactions), (b) formulate an equilibrium type (a ‘stable partial dynamic equilibrium’) that solves these problems, and (c) demonstrate the applicability of this equilibrium type as a foundation of the NEPCAs used in the AK growth model. Finally, we discuss some topics for further research