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Structural change in a multi-sector model of growth

Ngai, L. Rachel and Pissarides, Christopher (2005) Structural change in a multi-sector model of growth. IZA discussion paper, 1800. The Institute for the Study of Labor (IZA), Bonn, Germany. (Unpublished)

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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.

Item Type: Monograph (Discussion Paper)
Official URL: URL:
Additional Information: © 2007 IZA - Institute of Labor published in: American Economic Review, 2007, 97 (1), 429-443
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
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Date Deposited: 06 May 2008 15:39
Last Modified: 19 Oct 2011 10:49

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