Economic Development, variety and employment
AbstractThis paper studies qualitative change taking place during economic development. In the model presented qualitative change is created by the mergence of new sectors, each of which produces an output that is different from other sectors. A system with a variable number of sectors is simulated. The model predicts that under given conditions the evolution of a sector tends to follow a life cycle in both the number of firms and in terms of employment. The cyclical behavior is determined by the balance between the increasing intensity of competition, saturating demand and increasing retuns to adoption. In its present form the model is a simplified representation of the economic system, but several improvements can be introduced in order to increase its degree of realism.
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Bibliographic InfoPaper provided by Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness in its series Working Papers with number geewp35.
Date of creation: Sep 2003
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economic development; employment; multisectoral model;
Other versions of this item:
- NEP-ALL-2003-11-09 (All new papers)
- NEP-DEV-2003-11-09 (Development)
- NEP-ENT-2003-11-09 (Entrepreneurship)
- NEP-INO-2003-11-09 (Innovation)
- NEP-TID-2003-11-09 (Technology & Industrial Dynamics)
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