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A unified theory of structural change

  • Chris Papageorgiou

    ()

    (Louisiana State University)

  • Fidel Pérez Sebastián

    ()

    (Universidad de Alicante)

  • María Dolores Guilló Fuentes

    ()

    (Universidad de Alicante)

This paper uses dynamic general equilibrium and computational methods, inspired by the multi-sector growth model structure in Stephen Turnovsky’s previous and more recent work, to develop a theory that unifies two of the traditional explanations of structural change: sector-biased technical change and non-homothetic preferences. More specifically, we build a multisector overlapping generations growth model with endogenous technical-change and non-homothetic preferences based on an expanding-variety setup with two different R&D technologies; one for agriculture, and another for non-agriculture. Results give additional support to the biased technical-change hypothesis as an important determinant of the structural transformation. The paper also explores where this bias might come from. Our findings suggest that production-side specific factors, such as asymmetries in cross-sector knowledge spillovers could be behind it, and therefore be important to fully explain the process of structural change.

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File Function: Fisrt version / Primera version, 2010
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Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2010-34.

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Length: 30 pages
Date of creation: Jan 2010
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2010-34
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  1. Stephen J. Turnovsky, 2000. "The Transitional Dynamics Of Fiscal Policy; Long-Run Capital Accumulation And Growth," Computing in Economics and Finance 2000 199, Society for Computational Economics.
  2. 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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  4. Ngai, Liwa Rachel & Pissarides, Christopher, 2004. "Structural Change in a Multi-Sector Model of Growth," CEPR Discussion Papers 4763, C.E.P.R. Discussion Papers.
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  7. Charles I. Jones & John C. Williams, . "Too Much of a Good Thing? The Economics of Investment in R&D," Working Papers 96005, Stanford University, Department of Economics.
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  26. L. F. Giblin., 1940. "Economic Progress," The Economic Record, The Economic Society of Australia, vol. 16(2), pages 262-270, December.
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  28. Luis J. Hall, 2010. "Differentiated social interactions in the US schooling race gap," Working Papers. Serie AD 2010-17, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  29. Papageorgiou, Chris & Perez-Sebastian, Fidel, 2006. "Dynamics in a non-scale R&D growth model with human capital: Explaining the Japanese and South Korean development experiences," Journal of Economic Dynamics and Control, Elsevier, vol. 30(6), pages 901-930, June.
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  34. José J. Sempere Monerris & Rafael Moner Colonques & Amparo Urbano Salvador, 2010. "Trade liberalization in vertically related markets," Working Papers. Serie AD 2010-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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