Structural Change and Decisions on Investment Allocation
AbstractIn this article the growth models of Feldman (1928) and Mahalanobis (1953) are extended to analyse the implications of the process of structural change on the decisions of investment allocation. By using the device of vertical integration, their constructions are shown to be a particular case of the Pasinetti’s (1981) model of structural change. Their analysis is then carried out in a multi-sector framework, where both productivity and demand change at a particular rate in each of the sectors. A particular rate of investment allocation for each sector is established subject to the full employment of the labour force. Following these lines, we are able to put some of the Halevi’s (1996) descriptive observations into a formal context and within this context to analyse and to extend his ideas about the role of demand on the decisions of investment allocation. Finally, an additional condition is added to the Pasinetti’s model in order to fully characterise the equilibrium path in the most general version of his framework, where capital goods are needed to produce capital goods.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 53293.
Date of creation: 2002
Date of revision:
Publication status: Published in Structural Change and Economic Dynamics 13.2(2002): pp. 249-258
Structural Dynamics; Investment Allocation; Multi-sector Models; Vertical Integration.;
Other versions of this item:
- Araujo, Ricardo Azevedo & Teixeira, Joanilio Rodolpho, 2002. "Structural change and decisions on investment allocation," Structural Change and Economic Dynamics, Elsevier, vol. 13(2), pages 249-258, June.
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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- Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2012. "Capital-Specific Technological Change and Human Capital Accumulation in a Model of Export-Led Growth," PSL Quarterly Review, Economia civile, vol. 65(262), pages 275-311.
- Araujo, Ricardo Azevedo & Lima, Gilberto Tadeu, 2011. "Embodied technological change, capital sectoral allocation and export-led growth," MPRA Paper 29810, University Library of Munich, Germany.
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