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Structural Change and Business Cycles: An Evolutionary Approach


  • André Lorentz


  • Maria Savona


The aim of this paper is to account for both the short-run fluctuations and the very-long run transformations induced by technological change in analysing long-run growth patterns. The paper investigates the possible imprint left by short-run fluctuations on the long run dynamics by affecting the mechanisms underlying structural change. To fulfil this aim, we revert to a growth model with evolutionary microfounded structural change. The model endogenies both technical change and changes in patterns of final and intermediate demand as affecting macro-economic growth, through the structural change of the economy. This work is in line with the attempts to embracing in a unifying framework both neo-Schumpeterian and Keynesian line of thoughts in explaining economic growth. This model directly extends the one presented in Lorentz and Savona (2008). The paper reverts to numerical simulations to investigate both the imprint of various business cycles scenarios on the structural change patterns and the effect of various structural change scenarios on the amplitude of business cycles. We carry out the numerical simulation on the basis of the actual I-O coefficients for Germany. These numerical simulations show us that one the one hand, the factor at the source of business cycles drastically affect the patterns of structural change. On the other hand, the mechanisms at the core of structural change, generates business cycles as a by-product.

Suggested Citation

  • André Lorentz & Maria Savona, 2010. "Structural Change and Business Cycles: An Evolutionary Approach," Papers on Economics and Evolution 2010-21, Philipps University Marburg, Department of Geography.
  • Handle: RePEc:esi:evopap:2010-21

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    References listed on IDEAS

    1. Dos Santos Ferreira, Rodolphe & Dufourt, Frederic, 2006. "Free entry and business cycles under the influence of animal spirits," Journal of Monetary Economics, Elsevier, vol. 53(2), pages 311-328, March.
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    Cited by:

    1. Martin Binder & Felix Ward, 2011. "The Structure of Happiness: A Vector Autoregressive Approach," Papers on Economics and Evolution 2011-08, Philipps University Marburg, Department of Geography.

    More about this item


    Structural Change; Technical Change; Economic Growth; Short-run Fluctuations Length 39 pages;

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models


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