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Testing the growth effects of structural change

  • Hartwig, Jochen

Against the backdrop of Baumol's model of ‘unbalanced growth’, a recent strand of literature has presented models that manage to reconcile structural change with Kaldor's ‘stylized fact’ of the relative constancy of per-capita real GDP growth. Another strand of literature goes beyond this, arguing that the expenditure shifts toward Baumol's ‘stagnant’ sector stimulate rather than dampen long-term economic growth because of the human capital-accumulating nature of major ‘stagnant’ services (like health care and education). This paper tests the relationship between structural change and economic growth empirically by means of a Granger-causality analysis of a panel of 18 OECD countries.

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Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 23 (2012)
Issue (Month): 1 ()
Pages: 11-24

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Handle: RePEc:eee:streco:v:23:y:2012:i:1:p:11-24
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