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Structural change in a multi-sector model of growth

Ngai, L. Rachel and Pissarides, Christopher ORCID: 0000-0002-0695-058X (2007) Structural change in a multi-sector model of growth. American Economic Review, 97 (1). 429 - 443. ISSN 0002-8282

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Identification Number: 10.1257/000282807780323460


We study a multisector 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. Along the balanced growth path, labor employed in the production of consumption goods gradually moves to the sector with the lowest TFP growth rate, until in the limit it is the only sector with nontrivial employment of this kind. The employment shares of intermediate and capital goods remain constant during the reallocation process.

Item Type: Article
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Additional Information: © 2007 American Economic Association
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HB Economic Theory
JEL classification: O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
Date Deposited: 23 Apr 2008 11:26
Last Modified: 12 Apr 2024 03:57

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