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Testing the growth effects of structural change

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Against the backdrop of Baumol’s model of ‘unbalanced growth’, a recent strand of literature has presented models that manage to reconcile structural change with Kaldor’s ‘stylized fact’ of the relative constancy of per-capita GDP growth. Another strand of literature goes beyond this, arguing that the expenditure shifts toward Baumol’s ‘stagnant’ sector stimulate rather than dampen long-term economic growth because of the human capital-accumulating nature of major ‘stagnant’ services (like health care and education). This paper tests the relationship between structural change and economic growth empirically by means of a Granger-causality analysis of a panel of 18 OECD countries.

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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 10-264.

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Length: 34 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:kof:wpskof:10-264

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Keywords: Economic growth; structural change; human capital; Panel Granger-causality tests;

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Cited by:
  1. Dobrescu, Emilian, 2011. "Sectoral Structure and Economic Growth," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-36, September.
  2. Cristian Dragos & Simona Laura Dragos, 2012. "Econometric Estimations of the Services and Financial Sector Impact on Economic Growth Variations in Times of Crisis," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(Special N), pages 621-634, November.
  3. HORI Takeo & UCHINO Taisuke, 2013. "Competition, Productivity Growth, and Structural Change," Discussion papers 13041, Research Institute of Economy, Trade and Industry (RIETI).
  4. Marta C. N. Simões & Adelaide Duarte, 2013. "Human Capital and Growth in a Services Economy: the Case of Portugal," GEMF Working Papers 2013-21, GEMF - Faculdade de Economia, Universidade de Coimbra.

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