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Labor productivity and energy use in a three sector model: An application to Egypt

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  • Rudiger von Arnim
  • Codrina Rada

Abstract

This paper presents a model of a developing economy with three sectors---a modern sector producing manufactures and services, a traditional sector producing agricultural goods, and a third sector providing energy. Modern and energy sector are assumed to be demand--constrained; the agricultural sector is supply--constrained. Simulation exercises confirm insights of existing theory on structural heterogeneity: A price--clearing agricultural sector can impose an inflationary barrier on growth. Further, emphasis is placed on the sources of productivity growth. Specifically, higher energy intensity rather than increases in energy productivity enable labor productivity growth, with the attendant complications for 'green growth'.

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File URL: http://economics.utah.edu/publications/2011_06.pdf
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Bibliographic Info

Paper provided by University of Utah, Department of Economics in its series Working Paper Series, Department of Economics, University of Utah with number 2011_06.

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Length: 26 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:uta:papers:2011_06

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Related research

Keywords: Structural heterogeneity; Multi-sector model; Energy use JEL Classification: O41; Q43; C63;

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Cited by:
  1. Codrina Rada & Rüdiger von Arnim, 2012. "India’s structural transformation and role in the world economy," Working Paper Series, Department of Economics, University of Utah 2012_05, University of Utah, Department of Economics.

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