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Structural change with dynamics of capital income share

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  • Liu, Yue

Abstract

This paper highlights a new fact about structural change by focusing on the dynamics of the capital income share at the sectoral level. That is, the capital income share in services decreases steadily while that in the manufacturing sector increases over time. I develop a two-sector growth model where capital intensity in each sector can change endogenously with capital deepening. The change in capital intensities further induces a reallocation of labor and capital across sectors.

Suggested Citation

  • Liu, Yue, 2012. "Structural change with dynamics of capital income share," Economics Letters, Elsevier, vol. 116(3), pages 597-600.
    • Handle: RePEc:eee:ecolet:v:116:y:2012:i:3:p:597-600
    DOI: 10.1016/j.econlet.2012.05.055
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    Cited by:

    1. Pi, Jiancai & Zhang, Pengqing, 2018. "Structural change and wage inequality," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 699-707.
    2. Liu, Yue, 2017. "The impact of income distribution on structural transformation: The role of extensive margin," Economic Modelling, Elsevier, vol. 64(C), pages 357-364.
    3. Mary O'Mahony & Michela Vecchi & Francesco Venturini, 2019. "Technology, Intangible Assets and the Decline of the Labor Share," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2019-17, Economic Statistics Centre of Excellence (ESCoE).

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    More about this item

    Keywords

    Structural change; Capital intensity; Two-sector growth model;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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