Growing economies often exhibit constant growth rates, constant interest rates, and an increasing urban share of their population. We show that the equilibrium path triggered by a capital-biased technological revolution can account for these regularities. This type of technological change can generate an aggregate production function that displays linear segments. As the economy moves along those segments, the interest rate and the growth rate are constant, and labor is gradually reallocated from the old (rural) techniques to the new (urban) techniques. The model predicts that developed countries must experience a sudden slowdown in their growth rates once their structural change is completed. Productivity, as measured by the Solow residuals, also displays a growth slowdown. Cross-country evidence supports these predictions of the model.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Rice University, Department of Economics in its series Working Papers with number
2002-01.
Find related papers by JEL classification: O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 1997.
"Beyond Balanced Growth,"
NBER Working Papers
6159, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Did you know? You can import bibliographic info in various formats into you bibliographic tool, or just into your word processor. See under "publisher info" on each abstract page.