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Structural Change and Non-Constant Biased Technical Change

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  • Edgar Cruz

    () (Facultat d'Economia i Empresa; Universitat de Barcelona (UB))

Abstract

Empirical evidence suggests that the differences in rates of technical progress across sectors are time-variant, implying that the bias in technological change is not constant. In this paper, we analyze the implications of this non-constant sectoral biased technical change for structural change and we assess whether this is an important factor behind structural transformations. To this end, we develop a multi-sectoral growth model where TFP growth rates across sectors are non-constant. We calibrate our model to match the development of the U.S. economy during the twentieth century. Our findings show that, by assuming non-constant biased technical change, a purely technological approach is able to replicate the sectoral transformations in the U.S. economy not only after but also prior to the World War II.

Suggested Citation

  • Edgar Cruz, 2015. "Structural Change and Non-Constant Biased Technical Change," UB Economics Working Papers 2015/324, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
  • Handle: RePEc:ewp:wpaper:324web
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    References listed on IDEAS

    as
    1. Douglas Gollin & David Lagakos & Michael E. Waugh, 2014. "Agricultural Productivity Differences across Countries," American Economic Review, American Economic Association, vol. 104(5), pages 165-170, May.
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    More about this item

    Keywords

    Multi-sector growth model; Structural change; Sector biased technical change; Baumol effect.;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • E29 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Other

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