Oulton, Nicholas (2001) Must the growth rate decline?: Baumol's unbalanced growth revisited. Oxford Economic Papers, 53 (4). pp. 605-627. ISSN 0030-7653
According to Baumol's model of unbalanced growth, if resources are shifting towards industries where productivity is growing relatively slowly, the aggregate productivity growth rate will slow down. This conclusion is often applied to the advanced economies, where resources are indeed shifting towards the relatively stagnant service industries. But Baumol's conclusion only follows logically if the stagnant industries produce final products. If instead they produce intermediate products, the aggregate productivity growth rate may rise rather than fall. This is empirically relevant since the most rapidly expanding service industries, e.g. business services, are producing mainly for intermediate use.
|Additional Information:||© 2001 Oxford University Press|
|Library of Congress subject classification:||H Social Sciences > HB Economic Theory|
|Sets:||Research centres and groups > Centre for Economic Performance (CEP)|
|Date Deposited:||21 Mar 2013 15:46|
Actions (login required)
|Record administration - authorised staff only|