A unified theory of structural change

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Title: A unified theory of structural change
Authors: Guillo, Maria Dolores | Papageorgiou, Chris | Pérez Sebastián, Fidel
Research Group/s: Grupo de Estudios de Paz y Desarrollo (GEPYD) | Análisis Económico
Center, Department or Service: Universidad de Alicante. Departamento de Métodos Cuantitativos y Teoría Económica | Universidad de Alicante. Departamento de Fundamentos del Análisis Económico
Keywords: Multi-sector growth model | Structural change | Agriculture and non-agriculture | R&D | Directed innovation | Hon-homothetic preferences
Knowledge Area: Fundamentos del Análisis Económico
Issue Date: 2010
Publisher: Instituto Valenciano de Investigaciones Económicas
Citation: GUILLÓ, M. Dolores; PAPAGEORGIOU, Chris; PÉREZ-SEBASTIÁN, Fidel. “A unified theory of structural change”. Working Papers (Instituto Valenciano de Investigaciones Económicas). WP-AD 2010-34
Abstract: This paper uses dynamic general equilibrium and computational methods, inspired by the multi-sector growth model structure in Stephen Turnovsky’s previous and more recent work, to develop a theory that unifies two of the traditional explanations of structural change: sector-biased technical change and non-homothetic preferences. More specifically, we build a multisector overlapping generations growth model with endogenous technical-change and non-homothetic preferences based on an expanding-variety setup with two different R&D technologies; one for agriculture, and another for nonagriculture. Results give additional support to the biased technical-change hypothesis as an important determinant of the structural transformation. The paper also explores where this bias might come from. Our findings suggest that production-side specific factors, such as asymmetries in cross-sector knowledge spillovers could be behind it, and therefore be important to fully explain the process of structural change.
Sponsor: Financial support from Ministerio de Ciencia e Innovación and FEDER funds under project SEJ-2007-62656, and from Instituto Valenciano de Investigaciones Económicas.
URI: http://hdl.handle.net/10045/23699
Language: eng
Type: info:eu-repo/semantics/workingPaper
Peer Review: si
Publisher version: http://www.ivie.es/pub/wp/wp.php
Appears in Collections:INV - GEPYD - Working Papers
INV - Análisis Económico - Working Papers
INV - DMCTE - Working Papers

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