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The Effect Of Consumption And Production Structure On Growth And Distribution. A Micro To Macro Model

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  • Tommaso Ciarli
  • André Lorentz
  • Maria Savona
  • Marco Valente

Abstract

The paper offers a theoretical analysis of long‐run economic growth as an outcome of structural changes. We model the microeconomic behaviour of firms in the final good and capital sectors, and the evolution of classes of workers/consumers. We carefully craft economic behaviour onto empirical evidence, and solve the model numerically. The results illustrate the microeconomic properties of the simulated growth patterns. In particular, we observe and explain the interactions between technological change, firm organization, income distribution, consumption behaviour and growth. We confirm the relevance and interdependence of these structural changes, and underline their microeconomic sources.

Suggested Citation

  • Tommaso Ciarli & André Lorentz & Maria Savona & Marco Valente, 2010. "The Effect Of Consumption And Production Structure On Growth And Distribution. A Micro To Macro Model," Metroeconomica, Wiley Blackwell, vol. 61(1), pages 180-218, February.
    • Handle: RePEc:bla:metroe:v:61:y:2010:i:1:p:180-218
    DOI: 10.1111/j.1467-999X.2009.04069.x
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    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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