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Heterogeneous Consumption Goods, Sectoral Change, and Economic Growth

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  • Steger Thomas M.

    () (ETH Zurich)

Abstract

This paper sets up a simple AK-type growth model with heterogeneous consumption goods. It is shown that the (overall) intertemporal elasticity of substitution, the saving rate, and the growth rate of income unambiguously increase in the course of economic development. Moreover, the model offers an intuitive explanation of sectoral change. It is demonstrated that there are a number of implications which are in line with the empirical evidence on economic growth and sectoral change.

Suggested Citation

  • Steger Thomas M., 2006. "Heterogeneous Consumption Goods, Sectoral Change, and Economic Growth," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 10(1), pages 1-18, March.
  • Handle: RePEc:bpj:sndecm:v:10:y:2006:i:1:n:2
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Masao Ogaki & Jonathan D. Ostry & Carmen M. Reinhart, 1996. "Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 38-71, March.
    3. Meckl, Jürgen, 1999. "Structural change and generalized balanced growth," Discussion Papers, Series I 298, University of Konstanz, Department of Economics.
    4. Reto Foellmi & Josef Zweim�ller, "undated". "Structural Change and the Kaldor Facts of Economic Growth," IEW - Working Papers 111, Institute for Empirical Research in Economics - University of Zurich.
    5. Zind, Richard G., 1991. "Income convergence and divergence within and between LDC groups," World Development, Elsevier, vol. 19(6), pages 719-727, June.
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    Cited by:

    1. repec:bpj:bejmac:v:17:y:2017:i:2:p:23:n:3 is not listed on IDEAS
    2. Cruz Edgar, 2017. "Structural change and non-constant biased technical change," The B.E. Journal of Macroeconomics, De Gruyter, pages 1-23.
    3. Alonso-Carrera, Jaime & Raurich, Xavier, 2010. "Growth, sectoral composition, and the evolution of income levels," Journal of Economic Dynamics and Control, Elsevier, vol. 34(12), pages 2440-2460, December.
    4. Jaime Alonso-Carrera & Xavier Raurich, 2006. "Growth, Sectoral Composition, and the Wealth of Nations," DEGIT Conference Papers c011_019, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Stijepic, Denis & Wagner, Helmut, 2008. "Impacts of Intermediate Trade on Structural Change," MPRA Paper 40841, University Library of Munich, Germany, revised 23 Aug 2012.

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