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Structural change and non-constant biased technical change

Author

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  • Cruz Edgar

    (Department of Economics and Finance, University of Guanajuato, 4th Floor, Fraccionamiento 1, Col. El Establo S/N, C.P. 36250, Guanajuato, Mexico)

Abstract

Empirical evidence suggests that the differences in rates of technical progress across sectors are time-variant, implying that the bias in technological change is not constant. In this paper, we analyze the implications of this non-constant sectoral biased technical change for structural change and we assess whether this is an important factor behind structural transformations. To this end, we develop a multi-sectoral growth model where TFP growth rates across sectors are non-constant. We calibrate our model to match the development of the U.S. economy during the twentieth century. Our findings show that, by assuming non-constant biased technical change, a purely technological approach is able to replicate the sectoral transformations in the U.S. economy not only after but also prior to World War II.

Suggested Citation

  • Cruz Edgar, 2017. "Structural change and non-constant biased technical change," The B.E. Journal of Macroeconomics, De Gruyter, vol. 17(2), pages 1-23, June.
    • Handle: RePEc:bpj:bejmac:v:17:y:2017:i:2:p:23:n:3
    DOI: 10.1515/bejm-2015-0046
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    1. Cynthia Armas & Fernando Sánchez-Losada, 2021. "Structural change and the income of nations," UB School of Economics Working Papers 2021/412, University of Barcelona School of Economics.

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    Keywords

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    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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