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Cumulative Causation in a Structural Economic Dynamic Approach to Economic Growth and Uneven Development

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  • Araujo, Ricardo

Abstract

The Structural Economic Dynamic approach is distinguished by its simultaneous approach to demand and supply sides of economic growth. However, the idea that growth itself can transform an economy, which became known in the literature as cumulative causation, cannot be properly studied by this framework because technological progress is treated in the same manner as in the traditional Neoclassical model, that is, it is exogenous. Besides, it is the only source of economy growth with no role played by demand in the pace of economic growth but only in the sectoral composition of the economy. Here we introduce Verdoon’s Law in the Pasinetti’s model of structural change thus making it able to study cumulative causation and thus rendering structural changes endogenous in this model.

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  • Araujo, Ricardo, 2011. "Cumulative Causation in a Structural Economic Dynamic Approach to Economic Growth and Uneven Development," MPRA Paper 29960, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:29960
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    3. Araujo, Ricardo Azevedo & Santini, Theo & de Acypreste, Rafael, 2023. "A vertically integrated approach to increasing returns and cumulative causation," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 49-58.
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    5. Missio, Fabricio & Araujo, Ricardo Azevedo & Jayme, Frederico G., 2017. "Endogenous elasticities and the impact of the real exchange rate on structural economic dynamics," Structural Change and Economic Dynamics, Elsevier, vol. 42(C), pages 67-75.
    6. Freire Junior, Clovis, 2017. "Economic diversification: Explaining the pattern of diversification in the global economy and its implications for fostering diversification in poorer countries," MERIT Working Papers 2017-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Hiroshi Nishi, 2014. "A Multi-Sectoral Balance-of-Payments-Constrained Growth Model with Sectoral Heterogeneity:International Competition, Productivity Dynamics, and Economic Growth," Discussion papers e-13-005, Graduate School of Economics Project Center, Kyoto University.
    8. Robert A. Blecker, 2022. "New advances and controversies in the framework of balance‐of‐payments‐constrained growth," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 429-467, April.
    9. Ricardo Azevedo Araujo, 2016. "Assessing the dynamics of terms of trade inamodelof cumulative causation andstructural change," Brazilian Journal of Political Economy, Center of Political Economy, vol. 36(1), pages 150-167.
    10. Guilherme R. Magacho & John S. L. McCombie, 2020. "Structural change and cumulative causation: A Kaldorian approach," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 633-660, July.
    11. Emiliano Brancaccio & Raffaele Giammetti & Milena Lopreite & Michelangelo Puliga, 2023. "Convergence in solvency and capital centralization: A B‐VAR analysis for high‐income and euro area countries," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 40-73, February.
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    13. Porcile, Gabriel & Spinola, Danilo & Yajima, Giuliano, 2021. "Patterns of Growth in Structuralist Models: The Role of PoliticalEconomy," CAFE Working Papers 12, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    14. Freire, Clovis, 2019. "Economic diversification: A model of structural economic dynamics and endogenous technological change," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 13-28.
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    16. Araujo, Ricardo Azevedo & Trigg, Andrew B., 2015. "A neo-Kaldorian approach to structural economic dynamics," Structural Change and Economic Dynamics, Elsevier, vol. 33(C), pages 25-36.
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    18. Rafael De Acypreste & Joao Gabriel De Araujo Oliveira, 2022. "Structural change, an open economy and employment: A structural change and economic dynamics approach," PSL Quarterly Review, Economia civile, vol. 75(300), pages 47-62.
    19. Reto Foellmi & Josef Zweimüller, 2017. "Is inequality harmful for innovation and growth? Price versus market size effects," Journal of Evolutionary Economics, Springer, vol. 27(2), pages 359-378, April.
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    21. Nishi, Hiroshi, 2016. "A multi-sectoral balance-of-payments-constrained growth model with sectoral heterogeneity," Structural Change and Economic Dynamics, Elsevier, vol. 39(C), pages 31-45.
    22. Kemp-Benedict, Eric, 2014. "A Kaleckian Model with Intermediate Goods," MPRA Paper 57076, University Library of Munich, Germany.

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    More about this item

    Keywords

    Cumulative causation; structural change; Verdoon’s law;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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