IDEAS home Printed from https://ideas.repec.org/p/dar/wpaper/77461.html
   My bibliography  Save this paper

Numerical Explorations of the Ngai-Pissarides Model of Growth and Structural Change

Author

Listed:
  • Dietrich, Andreas
  • Krüger, Jens

Abstract

In this paper we specialize the Ngai-Pissarides model of growth and structural change [American Economic Review 97 (2007), 429-443] to the case of three sectors, representing the primary (agriculture, mining), secondary (construction, manufacturing) and tertiary (services) sectors. On that basis we explore the dynamic properties of the model along the transition path to the steady-state equilibrium by numerical methods. Our explorations show that the model misses several stylized facts of structural change among these sectors. We propose several extensions of the model to align the model more closely with the facts.

Suggested Citation

  • Dietrich, Andreas & Krüger, Jens, 2010. "Numerical Explorations of the Ngai-Pissarides Model of Growth and Structural Change," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 77461, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
  • Handle: RePEc:dar:wpaper:77461
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/77461/
    as

    Download full text from publisher

    File URL: http://tuprints.ulb.tu-darmstadt.de/4727
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Victor R. Fuchs, 1968. "Some Implications of the Growth of a Service Economy," NBER Chapters, in: The Service Economy, pages 183-199, National Bureau of Economic Research, Inc.
    2. Nordhaus William D, 2008. "Baumol's Diseases: A Macroeconomic Perspective," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-39, February.
    3. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "International Trade with Endogenous Technological Change," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 2, pages 33-70, World Scientific Publishing Co. Pte. Ltd..
    4. Valerie A. Ramey & Neville Francis, 2009. "A Century of Work and Leisure," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(2), pages 189-224, July.
    5. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    6. R. C. Geary, 1950. "A Note on "A Constant-Utility Index of the Cost of Living"," Review of Economic Studies, Oxford University Press, vol. 18(1), pages 65-66.
    7. Robert Rowthorn & Ramana Ramaswamy, 1999. "Growth, Trade, and Deindustrialization," IMF Staff Papers, Palgrave Macmillan, vol. 46(1), pages 1-2.
    8. Dietrich, Andreas & Krüger, Jens J., 2010. "Long-run sectoral development: Time-series evidence for the German economy," Structural Change and Economic Dynamics, Elsevier, vol. 21(2), pages 111-122, May.
    9. Charles I. Jones, 2003. "Growth, capital shares, and a new perspective on production functions," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    10. Gourieroux, C & Monfort, A & Renault, E, 1993. "Indirect Inference," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(S), pages 85-118, Suppl. De.
    11. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," Review of Economic Studies, Oxford University Press, vol. 68(4), pages 869-882.
    12. Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, American Economic Association, vol. 75(4), pages 806-817, September.
    13. Bonatti, Luigi & Felice, Giulia, 2008. "Endogenous growth and changing sectoral composition in advanced economies," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 109-131, June.
    14. Feinstein, Charles, 1999. "Structural Change in the Developed Countries during the Twentieth Century," Oxford Review of Economic Policy, Oxford University Press, vol. 15(4), pages 35-55, Winter.
    15. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 495-525.
    16. Maddison, Angus, 2007. "Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History," OUP Catalogue, Oxford University Press, number 9780199227204.
    17. Krüger, Jens & Dietrich, Andreas, 2010. "Long-Run Sectoral Development: Time Series Evidence for the German Economy," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 63657, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    18. David N. DeJong & Chetan Dave, 2007. "Introduction to Structural Macroeconometrics," Introductory Chapters, in: Structural Macroeconometrics, Princeton University Press.
    19. Meckl, Jürgen, 1999. "Structural change and generalized balanced growth," Discussion Papers, Series I 298, University of Konstanz, Department of Economics.
    20. Simon, Julian L, 1990. "Great and Almost-Great Magnitudes in Economics," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 149-156, Winter.
    21. John W. Kendrick, 1961. "Productivity Trends in the United States," NBER Books, National Bureau of Economic Research, Inc, number kend61-1, November.
    22. Gallant, A. Ronald & Tauchen, George, 1996. "Which Moments to Match?," Econometric Theory, Cambridge University Press, vol. 12(4), pages 657-681, October.
    23. Galor, Oded, 2005. "From Stagnation to Growth: Unified Growth Theory," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 4, pages 171-293, Elsevier.
    24. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    25. Dennis, Benjamin N. & Iscan, Talan B., 2009. "Engel versus Baumol: Accounting for structural change using two centuries of U.S. data," Explorations in Economic History, Elsevier, vol. 46(2), pages 186-202, April.
    26. Victor R. Fuchs, 1968. "The Service Economy," NBER Books, National Bureau of Economic Research, Inc, number fuch68-1, November.
    27. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-1238, December.
    28. Peter Stemp & Ric Herbert, 2006. "Solving Non-Linear Models with Saddle-Path Instabilities," Computational Economics, Springer;Society for Computational Economics, vol. 28(2), pages 211-231, September.
    29. Brown, Murray & Heien, Dale M, 1972. "The S-Branch Utility Tree: A Generalization of the Linear Expenditure System," Econometrica, Econometric Society, vol. 40(4), pages 737-747, July.
    30. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-452, May.
    31. Foellmi, Reto & Zweimüller, Josef, 2008. "Structural change, Engel's consumption cycles and Kaldor's facts of economic growth," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1317-1328, October.
    32. Witt, Ulrich, 1997. "Self-organization and economics--what is new?," Structural Change and Economic Dynamics, Elsevier, vol. 8(4), pages 489-507, October.
    33. Gomme, Paul & Rupert, Peter, 2007. "Theory, measurement and calibration of macroeconomic models," Journal of Monetary Economics, Elsevier, vol. 54(2), pages 460-497, March.
    34. Maddison, Angus, 1992. " A Long-Run Perspective on Saving," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 181-196.
    35. Ms. Piyabha Kongsamut & Danyang Xie & Mr. Sergio Rebelo, 2001. "Beyond Balanced Growth," IMF Working Papers 2001/085, International Monetary Fund.
    36. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Price, Juan José & Gómez-Lobo, Andrés, 2021. "Baumol’s cost disease and urban transport services in Latin America," Transportation Research Part A: Policy and Practice, Elsevier, vol. 149(C), pages 206-225.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Iscan Talan, 2010. "How Much Can Engel's Law and Baumol's Disease Explain the Rise of Service Employment in the United States?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-43, September.
    2. Andreas Dietrich, 2012. "Does growth cause structural change, or is it the other way around? A dynamic panel data analysis for seven OECD countries," Empirical Economics, Springer, vol. 43(3), pages 915-944, December.
    3. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    4. Fedderke, Johannes W., 2018. "Exploring unbalanced growth: Understanding the sectoral structure of the South African economy," Economic Modelling, Elsevier, vol. 72(C), pages 177-189.
    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.
    6. Talan B. Işcan, 2009. "Engel and Baumol: How much can they explain the rise of service employment in the United States?," Working Papers daleconwp2009-03, Dalhousie University, Department of Economics.
    7. Helmut Wagner & Denis Stijepic, 2010. "The Kuznets-Kaldor-Puzzle and Neutral Cross-Capital-Intensity Structural Change," DEGIT Conference Papers c015_016, DEGIT, Dynamics, Economic Growth, and International Trade.
    8. Dalila Nicet-Chenaf & Eric Rougier, 2009. "Human capital and structural change: how do they interact with each others in growth," Post-Print hal-00798441, HAL.
    9. Dietrich, Andreas & Krüger, Jens J., 2010. "Long-run sectoral development: Time-series evidence for the German economy," Structural Change and Economic Dynamics, Elsevier, vol. 21(2), pages 111-122, May.
    10. Hartwig, Jochen, 2012. "Testing the growth effects of structural change," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 11-24.
    11. Bonatti, Luigi & Felice, Giulia, 2008. "Endogenous growth and changing sectoral composition in advanced economies," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 109-131, June.
    12. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    13. Stijepic, Denis & Wagner, Helmut, 2009. "Kuznets-Kaldor-puzzle, neutral structural change and independent preferences and technologies," MPRA Paper 37162, University Library of Munich, Germany, revised 07 Mar 2012.
    14. Sasaki, Hiroaki, 2012. "Endogenous phase switch in Baumol's service paradox model," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 25-35.
    15. Tahir Mahmood & Tahir Mahmood & Mikael Linden, 2017. "Structural Change and Economic Growth in Schengen Region," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 303-311.
    16. Alonso-Carrera, Jaime & Raurich, Xavier, 2015. "Demand-based structural change and balanced economic growth," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 359-374.
    17. Edgar Cruz & Xavier Raurich, 2020. "Leisure time and the sectoral composition of employment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 38, pages 198-219, October.
    18. Stijepic, Denis, 2019. "A topological approach to structural change analysis and an application to long-run labor allocation dynamics," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 453-462.
    19. 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.
    20. Edgar Cruz, 2019. "Kuznets meets Lucas: structural change and human capital," Oxford Economic Papers, Oxford University Press, vol. 71(4), pages 848-873.

    More about this item

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dar:wpaper:77461. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ivthdde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dekanatssekretariat (email available below). General contact details of provider: https://edirc.repec.org/data/ivthdde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.