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Growth and Structural Transformation

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  • Herrendorf, Berthold
  • Rogerson, Richard
  • Valentinyi, Akos

Abstract

Structural transformation refers to the reallocation of economic activity across the broad sectors agriculture, manufacturing and services. This review article synthesizes and evaluates recent advances in the research on structural transformation. We begin by presenting the stylized facts of structural transformation across time and space. We then develop a multi--sector extension of the one--sector growth model that encompasses the main existing theories of structural transformation. We argue that this multi--sector model serves as a natural benchmark to study structural transformation and that it is able to account for many salient features of structural transformation. We also argue that this multi--sector model delivers new and sharper insights for understanding economic development, regional income convergence, aggregate productivity trends, hours worked, business cycles, and wage inequality. We conclude by suggesting several directions for future research on structural transformation.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9370.

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Date of creation: Mar 2013
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Handle: RePEc:cpr:ceprdp:9370

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Keywords: approximate balanced growth; multi-sector growth model; structural transformation; stylized facts;

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Cited by:
  1. Agenor, Pierre-Richard & Dinh, Hinh, 2013. "From Imitation to Innovation: Public Policy for Industrial Transformation," World Bank - Economic Premise, The World Bank, issue 115, pages 1-8, May.
  2. Claudia Olivetti, 2013. "The Female Labor Force and Long-run Development: The American Experience in Comparative Perspective," NBER Chapters, in: Human Capital in History: The American Record National Bureau of Economic Research, Inc.
  3. Timo Boppart & Franziska J. Weiss, 2013. "Non-homothetic preferences and industry directed technical change," ECON - Working Papers 123, Department of Economics - University of Zurich.
  4. Gollin, Douglas & Rogerson, Richard, 2014. "Productivity, transport costs and subsistence agriculture," Journal of Development Economics, Elsevier, vol. 107(C), pages 38-48.
  5. Era Dabla-Norris & Alun H. Thomas & Rodrigo Garcia-Verdu & Yingyuan Chen, 2013. "Benchmarking Structural Transformation Across the World," IMF Working Papers 13/176, International Monetary Fund.
  6. repec:fip:fedreq:y:2011:i:3q:p:329-357:n:vol.97no.3 is not listed on IDEAS
  7. Benjamin Bridgman, 2013. "Home Productivity," BEA Working Papers 0091, Bureau of Economic Analysis.
  8. Paula Bustos & Bruno Caprettini & Jacopo Ponticelli, 2013. "Agricultural Productivity and Structural Transformation. Evidence from Brazil," Working Papers 736, Barcelona Graduate School of Economics.
  9. Pedro S. Amaral & James C. MacGee, 2012. "Re-Examining the Role of Sticky Wages in the U.S. Great Contraction: A Multi-sector Approach," University of Western Ontario, Economic Policy Research Institute Working Papers 20125, University of Western Ontario, Economic Policy Research Institute.

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