Guillo, Maria Dolores, Papageorgiou, Chris, Pérez Sebastián, Fidel
A unified theory of structural change
GUILLÓ, María Dolores; PAPAGEORGIOU, Chris; PÉREZ-SEBASTIÁN, Fidel. “A unified theory of structural change”. Journal of Economic Dynamics and Control. Vol. 35, No. 9 (Sept. 2011). ISSN 0165-1889, pp. 1393-1404
URI: http://hdl.handle.net/10045/23701
DOI: 10.1016/j.jedc.2011.05.004
ISSN: 0165-1889 (Print)
Abstract: 
This paper uses dynamic general equilibrium and computational methods, inspired by the multi-sector growth model structure in Stephen Turnovsky's work, to develop a theory that unifies two of the traditional explanations of structural change: sector-biased technical change and non-homothetic preferences. The theory is based on an overlapping-generations growth model with endogenous technical change and non-homothetic preferences. An expanding-variety setup with two different R&D technologies, agricultural, and non-agricultural, is employed. The analysis, based on numerical simulations, shows that the biased technical change hypothesis finds most support in the data. It also points to production-side specific factors, such as asymmetries in cross-sector knowledge spillovers, as explanatory factors of the bias in technical change.
Keywords:Multi-sector growth model, Structural change, Agriculture and non-agriculture R&D, Directed innovation, Hon-homothetic preferences
Elsevier
info:eu-repo/semantics/article