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On the Transition to Sustained Growth: The Importance of Recent Agricultural Employment

Author

Listed:
  • B. Ravikumar

    (Federal Reserve Bank of St. Louis)

  • Guillaume Vandenbroucke

    (Federal Reserve Bank of St. Louis)

Abstract

We study a model where a single good can be produced using a diminishing-returns technology (Malthus) and a constant-returns technology (Solow). We map the former to agriculture and show that the share of agricultural employment declines at a constant rate during the economic transition and that recent observations on the share are sufficient to estimate the onset of transition. Our model implies that (i) output growth is higher and increasing after the onset of transition, (ii) during the transition, it is a first-order autoregressive process, and (iii) the rate of decline in the share of agricultural employment is a sufficient statistic for the autoregressive coefficient. Our quantitative results are consistent with these implications for developed economies over more than a century despite the changes in the sectoral composition of output and for today's developing economies in various stages of development and structural transformation. (Copyright: Elsevier)

Suggested Citation

  • B. Ravikumar & Guillaume Vandenbroucke, 2025. "On the Transition to Sustained Growth: The Importance of Recent Agricultural Employment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 58, October.
    • Handle: RePEc:red:issued:25-14
    DOI: 10.1016/j.red.2025.101291
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    References listed on IDEAS

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    1. Jones Charles I., 2001. "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(2), pages 1-45, August.
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    3. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 323-350, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Malthus; Solow; Agricultural employment; Economic transition;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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