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Structural change, Engel's consumption cycles and Kaldor's facts of economic growth

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  • Foellmi, Reto
  • Zweimüller, Josef

Abstract

Non-linear Engel-curves for consumer goods cause continuous structural change. Goods are sequentially introduced starting out as a luxury with high income elasticity and ending up as a necessity with low income elasticity. Although this leads to rising and falling sectoral employment shares, the model exhibits a steady growth path along which the Kaldor facts are satisfied. Extending the basic model to the case of endogenous product innovations shows that complementarities between aggregate and sectoral growth may give rise to multiple equilibria.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 55 (2008)
Issue (Month): 7 (October)
Pages: 1317-1328
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:eee:moneco:v:55:y:2008:i:7:p:1317-1328

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Web page: http://www.elsevier.com/locate/inca/505566

For corrections or technical questions regarding this item, or to correct its listing, contact: (Jeroen Loos).

Related research

Keywords: Kaldor facts Engel-curve Structural change Structural transformation Hierarchic preferences Demand externalities Multiple equilibria;

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Citations

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Cited by:
  1. Francisco Alvarez-Cuadrado & Ngo Van Long, 2011. "Capital-Labor Substitution, Structural Change and Growth," CIRANO Working Papers 2011s-68, CIRANO.
  2. Dobrescu, Emilian, 2011. "Sectoral Structure and Economic Growth," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-36, September.
  3. Andreas Chai & Alessio Moneta, 2011. "Back to Engel? Some evidence for the hierarchy of needs," Papers on Economics and Evolution 2011-13, Max Planck Institute of Economics, Evolutionary Economics Group.
  4. Dalila NICET – CHENAF (GREThA UMR CNRS 5113) & Eric ROUGIER (GREThA UMR CNRS 5113), 2009. "Human capital and structural change: how do they interact with each other in growth?," Cahiers du GREThA 2009-14, Groupe de Recherche en Economie Théorique et Appliquée.
  5. Johansson, Anders C. & Wang, Xun, 2011. "Financial Repression And Structural Imbalances," Working Paper Series 2011-19, China Economic Research Center, Stockholm School of Economics.
  6. Francisco J. Buera & Joseph Kaboski, 2008. "Scale and the origins of structural change," Working Paper Series WP-08-06, Federal Reserve Bank of Chicago.

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