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Structural Change, Aggregate Growth And Government Services

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  • Stijepic, Denis
  • Wagner, Helmut

Abstract

Recent literature studies structural change and aggregate dynamics in neoclassical multi-sector growth models. A central aspect of this literature is the explanation of Kaldor-Kuznets-stylized-facts , which state that massive structural change takes place while aggregate-dynamics are relatively stable in the long-run. We present a growth model analysing the role of government in structural change and aggregate growth. We show that, besides distortionary effects on the sector structure, the provision of government services has an impact on the intertemporal elasticity of substitution of the representative household and, thus, on aggregate dynamics. These results can be used to explain the Kaldor-Kuznets-facts.

Suggested Citation

  • Stijepic, Denis & Wagner, Helmut, 2015. "Structural Change, Aggregate Growth And Government Services," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112904, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112904
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    References listed on IDEAS

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    Cited by:

    1. Glawe, Linda & Wagner, Helmut, 2017. "A stylized model of China’s growth since 1978," CEAMeS Discussion Paper Series 5/2017, University of Hagen, Center for East Asia Macro-economic Studies (CEAMeS), revised 2017.
    2. Kurose, Kazuhiro, 2021. "Models of structural change and Kaldor’s facts: Critical survey from the Cambridge Keynesian perspective," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 267-277.

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    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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