Technological Progress, Factor Endowments and Structural Change:A Note
AbstractEconomic development is accompanied by structural change. The trade theoretic literature offers two major hypotheses – i. e., the factor-endowment and the total-factor-productivity-- for explaining the stylized facts of structural change. This note revisits these hypotheses. In particular, it explores, with the help of a simple geometric apparatus, the analytical implications of the two hypotheses and draws out their striking similarities. It argues that although the literature has treated these two hypotheses as distinctly different, they are indeed analytically equivalent in the sense that they are both based on a similar type of shifts in the production functions. An important implication of this analytical equivalence is that, compounded with the data problems, it makes the task of empirical testing and discriminating between the two alternative hypotheses virtually impossible.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25613.
Date of creation: Jul 2010
Date of revision:
Publication status: Published in Bangladesh Development Studies Number 4.32(2009): pp. 95-103
nontraded good; technological progress; total-factor-productivity; factor endowment; and economic growth;
Find related papers by JEL classification:
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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