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Productivity, Structural Change in Employment and Economic Growth

  • Enrique R. Casares

    (Universidad Autónoma Metropolitana)

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    We develop an endogenous growth model with two sectors, manufacturing and non-manufacturing. The manufacturing sector is the source of the balanced productivity growth. We study how the economy responds to shifts in sector-specific productivity. Thus, when the sector-specific productivity in the manufacturing sector increases, we find that the fraction of labor employed in the manufacturing sector follows an inverted V curve, and that the growth rate increases. Thus, the model captures approximately the documented pattern of development for the share of manufacturing employment, a bell shape over time. When the sector-specific productivity in the non-manufacturing sector increases, the growth rate remains unchanged because the non-manufacturing sector is the non-learning sector.

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    File URL: http://codex.colmex.mx:8991/exlibris/aleph/a18_1/apache_media/5V3NPV92IBJ7Q8K86T6S8S62FRTYV9.pdf
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    Article provided by El Colegio de México, Centro de Estudios Económicos in its journal Estudios Económicos.

    Volume (Year): 22 (2007)
    Issue (Month): 2 ()
    Pages: 335-355

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    Handle: RePEc:emx:esteco:v:22:y:2007:i:2:p:335-355
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    1. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 1997. "Beyond Balanced Growth," NBER Working Papers 6159, National Bureau of Economic Research, Inc.
    2. Ngai, L. Rachel & Pissarides, Christopher A., 2005. "Structural Change in a Multi-Sector Model of Growth," IZA Discussion Papers 1800, Institute for the Study of Labor (IZA).
    3. Daron Acemoglu & Veronica Guerrieri, 2006. "Capital Deepening and Non-Balanced Economic Growth," NBER Working Papers 12475, National Bureau of Economic Research, Inc.
    4. Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
    5. Nicholas Oulton, 2000. "Must the growth rate decline? Baumol's unbalanced growth revisited," Bank of England working papers 107, Bank of England.
    6. Kuznets, Simon, 1971. "Modern Economic Growth: Findings and Reflections," Nobel Prize in Economics documents 1971-2, Nobel Prize Committee.
    7. Vladimir Klyuev, 2004. "Evolution of the Relative Price of Goods and Services in a Neoclassical Model of Capital Accumulation," IMF Working Papers 04/207, International Monetary Fund.
    8. Paul Bergin & Reuven Glick & Alan M. Taylor, 2004. "Productivity, tradability, and the long-run price puzzle," Working Paper Series 2004-08, Federal Reserve Bank of San Francisco.
    9. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150, March.
    10. Francesco Caselli & Wilbur John Coleman II, 2001. "The U.S. Structural Transformation and Regional Convergence: A Reinterpretation," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 584-616, June.
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