IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Growth and Structural Transformation

  • Richard Rogerson

    (Arizona State University)

  • Akos Valentinyi

    (University of Southampton)

  • Berthold Herrendorf

    (Arizona State University)

We illustrate the usefulness of our approach by applying it to the so called Balassa-Samuelson effect, that is, in a cross sectional sense, countries with higher ppp adjusted incomes tend to have higher aggregate price levels (in a common numeraire). We show that as the US economy develops, its aggregate price level increases for two reasons. First, services experienced smaller TFP growth than the other two sectors. Second, the consumption share of services increased. This has the interesting implication that the difference in the aggregate price level between a slow and a fast growing economy should become larger over time. In other words, the Balassa-Samuelson effect should emerge endogenously. This prediction of our work is consistent with the observation that the Balassa-Samuleson effect is a fairly recent phenomenon that has become more pronounced over time.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Society for Economic Dynamics in its series 2007 Meeting Papers with number 757.

as
in new window

Length:
Date of creation: 2007
Date of revision:
Handle: RePEc:red:sed007:757
Contact details of provider: Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Fax: 1-314-444-8731
Web page: http://www.EconomicDynamics.org/society.htm
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, 07.
  2. Kongsamut, Piyabha & Rebelo, Sérgio & Xie, Danyang, 1997. "Beyond Balanced Growth," CEPR Discussion Papers 1693, C.E.P.R. Discussion Papers.
  3. Ngai, Liwa Rachel & Pissarides, Christopher, 2005. "Trends in Hours and Economic Growth," CEPR Discussion Papers 5440, C.E.P.R. Discussion Papers.
  4. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time over Five Decades," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 969-1006, 08.
  5. Galor, Oded & Weil, David, 1995. "The Gender Gap, Fertility and Growth," CEPR Discussion Papers 1157, C.E.P.R. Discussion Papers.
  6. Michael Bar & Oksana Leukhina, 2009. "Supplemental Notes to "Demographic transition and industrial revolution: A macroeconomic investigation"," Technical Appendices 08-85, Review of Economic Dynamics.
  7. Fumio Hayashi & Edward C. Prescott, 2006. "The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy," NBER Working Papers 12081, National Bureau of Economic Research, Inc.
  8. Kuznets, Simon, 1973. "Modern Economic Growth: Findings and Reflections," American Economic Review, American Economic Association, vol. 63(3), pages 247-58, June.
  9. Radoslaw Stefanski, 2010. "On the mechanics of the "Green Solow Model"," OxCarre Working Papers 047, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  10. Robert Dekle & Guillaume Vandenbroucke, 2006. "A quantitative analysis of China’s structural transformation," Working Paper Series 2006-37, Federal Reserve Bank of San Francisco.
  11. Michelle Rendall, 2013. "The Service Sector and Female Market Work: Europe vs the US," 2013 Meeting Papers 1202, Society for Economic Dynamics.
  12. Valerie A. Ramey & Neville Francis, 2006. "A Century of Work and Leisure," NBER Working Papers 12264, National Bureau of Economic Research, Inc.
  13. Willford Isbell King, 1930. "Industrial Origin of Total Realized Income," NBER Chapters, in: The National Income and Its Purchasing Power, pages 73-106 National Bureau of Economic Research, Inc.
  14. Richard Rogerson, 2007. "Structural Transformation and the Deterioration of European Labor Market Outcomes," NBER Working Papers 12889, National Bureau of Economic Research, Inc.
  15. Francisco Alvarez-Cuadrado & Ngo Van Long, 2011. "Capital-Labor Substitution, Structural Change and Growth," Cahiers de recherche 12-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  16. Bah, El-hadj, 2009. "Structural Transformation in Developed and Developing Countries," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 42, Verein für Socialpolitik, Research Committee Development Economics.
  17. Francisco J. Buera & Joseph P. Kaboski, 2012. "The Rise of the Service Economy," American Economic Review, American Economic Association, vol. 102(6), pages 2540-69, October.
  18. Berthold Herrendorf & Ákos Valentinyi, 2012. "Which Sectors Make Poor Countries So Unproductive?," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 323-341, 04.
  19. L. Rachel Ngai & Christopher Pissarides, 2007. "Structural change in a multi-sector model of growth," LSE Research Online Documents on Economics 4468, London School of Economics and Political Science, LSE Library.
  20. 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.
  21. Gary D. Hansen & Edward C. Prescott, 1999. "Malthus to Solow," Staff Report 257, Federal Reserve Bank of Minneapolis.
  22. Francisco Alvarez-Cuadrado & Markus Poschke, 2009. "Structural Change Out Of Agriculture: Labor Push Versus Labor Pull," Departmental Working Papers 2009-08, McGill University, Department of Economics.
  23. Laitner, John, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 545-61, July.
  24. Margarida Duarte & Diego Restuccia, 2007. "The Role of the Structural Transformation in Aggregate Productivity," Working Papers tecipa-300, University of Toronto, Department of Economics.
  25. Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
  26. David Lagakos & Michael E. Waugh, 2013. "Selection, Agriculture, and Cross-Country Productivity Differences," American Economic Review, American Economic Association, vol. 103(2), pages 948-80, April.
  27. Kiminori Matsuyama, 2009. "Structural Change in an Interdependent World: A Global View of Manufacturing Decline," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 478-486, 04-05.
  28. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August.
  29. Victor R. Fuchs, 1968. "The Service Economy," NBER Books, National Bureau of Economic Research, Inc, number fuch68-1, June.
  30. Benedikt Herz & Thijs van Rens, 2011. "Structural unemployment," Economics Working Papers 1276, Department of Economics and Business, Universitat Pompeu Fabra.
  31. Greenwood, J. & Hercowitz, Z. & Krusell, P., 1996. "Long-Run Implications of Investment-Specific Technological Change," RCER Working Papers 420, University of Rochester - Center for Economic Research (RCER).
  32. Berthold Herrendorf & Akos Valentinyi, 2013. "Sectoral Technology and Structural Transformation," 2013 Meeting Papers 349, Society for Economic Dynamics.
  33. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, 01.
  34. Diego Restuccia & Dennis Tao Yang & Xiaodong Zhu, 2003. "Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis," Working Papers diegor-03-01, University of Toronto, Department of Economics.
  35. 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.
  36. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
  37. Messina, Julián, 2003. "The role of product market regulations in the process of structural change," Working Paper Series 0217, European Central Bank.
  38. Vasco Carvalho & Xavier Gabaix, 2010. "The great diversification and its undoing," Economics Working Papers 1208, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2010.
  39. Buera, Francisco J. & Kaboski, Joseph P., 2012. "Scale and the origins of structural change," Journal of Economic Theory, Elsevier, vol. 147(2), pages 684-712.
  40. Berthold Herrendorf & Richard Rogerson & Akos Valentinyi, 2011. "Two Perspectives on Preferences and Structural Transformation," IEHAS Discussion Papers 1134, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  41. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
  42. Diego Restuccia & Margarida Duarte, 2011. "Relative Prices and Sectoral Productivity," 2011 Meeting Papers 1345, Society for Economic Dynamics.
  43. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
  44. Muellbauer, John, 1975. "Aggregation, Income Distribution and Consumer Demand," Review of Economic Studies, Wiley Blackwell, vol. 42(4), pages 525-43, October.
  45. Caselli, Francesco, 2004. "Accounting for Cross-Country Income Differences," CEPR Discussion Papers 4703, C.E.P.R. Discussion Papers.
  46. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1988. "Income Distribution, Market Size, and Industrialization," NBER Working Papers 2709, National Bureau of Economic Research, Inc.
  47. El-hadj M Bah & Josef C Brada, 2009. "Total Factor Productivity Growth, Structural Change and Convergence in the New Members of the European Union," Comparative Economic Studies, Palgrave Macmillan, vol. 51(4), pages 421-446, December.
  48. L. Rachel Ngai & Barbara Petrongolo, 2013. "Gender Gaps and the Rise of the Service Economy," CEP Discussion Papers dp1204, Centre for Economic Performance, LSE.
  49. 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.
  50. Timo Boppart, 2014. "Structural Change and the Kaldor Facts in a Growth Model With Relative Price Effects and Non‐Gorman Preferences," Econometrica, Econometric Society, vol. 82, pages 2167-2196, November.
  51. Francisco J. Buera & Joseph P. Kaboski, 2009. "Can Traditional Theories of Structural Change Fit The Data?," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 469-477, 04-05.
  52. Tasso Adamopoulos, 2006. "Transportation Costs, Agricultural Productivity and Cross-Country Income Differences," 2006 Meeting Papers 663, Society for Economic Dynamics.
  53. Blundell, Richard, 1988. "Consumer Behaviour: Theory and Empirical Evidence--a Survey," Economic Journal, Royal Economic Society, vol. 98(389), pages 16-65, March.
  54. Betts, Caroline & Giri, Rahul & Verma, Rubina, 2013. "Trade, Reform, And Structural Transformation in South Korea," MPRA Paper 49540, University Library of Munich, Germany.
  55. Debraj Ray, 2010. "Uneven Growth: A Framework for Research in Development Economics," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 45-60, Summer.
  56. Alessio Moro, 2009. "The structural transformation between manufacturing and services and the deline in the U.S. GDP volatility," Economics Working Papers we091409, Universidad Carlos III, Departamento de Economía.
  57. Akos Valentinyi & Berthold Herrendorf, 2008. "Measuring Factor Income Shares at the Sectoral Level," IEHAS Discussion Papers 0803, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  58. Vasco Carvalho & X. Gabaix, 2010. "The Great Diversification?," Working Papers 422, Barcelona Graduate School of Economics.
  59. Jeremy Greenwood & Ananth Seshadri, 2004. "Technological Progress and Economic Transformation," NBER Working Papers 10765, National Bureau of Economic Research, Inc.
  60. Robert G. King & Sergio T. Rebelo, 1989. "Transitional Dynamics and Economic Growth in the Neoclassical Model," NBER Working Papers 3185, National Bureau of Economic Research, Inc.
  61. Richard Rogerson, 2006. "Understanding Differences in Hours Worked," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(3), pages 365-409, July.
  62. Yongsung Chang & Andreas Hornstein, 2011. "Transition dynamics in the neoclassical growth model : the case of South Korea," Working Paper 11-04, Federal Reserve Bank of Richmond.
  63. 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 431-52, May.
  64. Daron Acemoglu & Veronica Guerrieri, 2006. "Capital Deepening and Non-Balanced Economic Growth," NBER Working Papers 12475, National Bureau of Economic Research, Inc.
  65. Berthold Herrendorf & James A. Schmitz, Jr. & Arilton Teixeira, 2012. "The Role Of Transportation In U.S. Economic Development: 1840–1860," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(3), pages 693-716, 08.
  66. Dale W. Jorgenson & Marcel P. Timmer, 2011. "Structural Change in Advanced Nations: A New Set of Stylised Facts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 1-29, 03.
  67. Francesco Caselli, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics 3567, London School of Economics and Political Science, LSE Library.
  68. Peter Timmer, C., 1988. "The agricultural transformation," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 8, pages 275-331 Elsevier.
  69. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," Center for Development Economics 2002-09, Department of Economics, Williams College.
  70. Akbulut, Rahşan, 2011. "Sectoral Changes And The Increase In Women'S Labor Force Participation," Macroeconomic Dynamics, Cambridge University Press, vol. 15(02), pages 240-264, April.
  71. Kiminori Matsuyama, 1990. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Discussion Papers 934, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  72. Katharine G. Abraham & Lawrence F. Katz, 1984. "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?," NBER Working Papers 1410, National Bureau of Economic Research, Inc.
  73. Robert E Hall & Charles I Jones, 2007. "The Value of Life and the Rise in Health Spending," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 39-72, 02.
  74. Simon Kuznets & Lillian Epstein & Elizabeth Jenks, 1941. "Distribution by Industrial Source," NBER Chapters, in: National Income and Its Composition, 1919-1938, Volume I, pages 161-214 National Bureau of Economic Research, Inc.
  75. Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273 Elsevier.
  76. Douglas Gollin & Richard Rogerson, 2010. "Agriculture, Roads, and Economic Development in Uganda," NBER Working Papers 15863, National Bureau of Economic Research, Inc.
  77. Gregory Clark, 2009. "The Macroeconomic Aggregates for England, 1209-2008," Working Papers 919, University of California, Davis, Department of Economics.
  78. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages F374-F403, 06.
  79. Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-93, August.
  80. Jose Maria Da Rocha & Diego Restuccia, 2006. "The Role of Agriculture in Aggregate Business Cycles," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(3), pages 455-482, July.
  81. Verma, Rubina, 2012. "Can total factor productivity explain value added growth in services?," Journal of Development Economics, Elsevier, vol. 99(1), pages 163-177.
  82. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-99, September.
  83. Dae-II Kim & Robert H. Topel, 1995. "Labor Markets and Economic Growth: Lessons from Korea's Industrialization, 1970-1990," NBER Chapters, in: Differences and Changes in Wage Structures, pages 227-264 National Bureau of Economic Research, Inc.
  84. 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.
  85. Ray, Debraj, 2010. "Uneven Growth: A Framework for Research in Development Economics," CAGE Online Working Paper Series 05, Competitive Advantage in the Global Economy (CAGE).
  86. Matsuyama, Kiminori, 1992. "A Simple Model of Sectoral Adjustment," Review of Economic Studies, Wiley Blackwell, vol. 59(2), pages 375-88, April.
  87. Benjamin N. Dennis & Talan Iscan, 2007. "Accounting for Structural Change: Evidence from Two Centuries of U.S. Data," Department of Economics at Dalhousie University working papers archive account7, Dalhousie, Department of Economics.
  88. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:red:sed007:757. 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: (Christian Zimmermann)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.