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Structural change and the Kaldor facts in a growth model with relative price effects and non-Gorman preferences

  • Timo Boppart

    (IIES, Stockholm University)

Growth is associated with (i) shifts in the sectoral structure of the economy, (ii) changes in relative prices and (iii) the Kaldor facts. Moreover, (iv) cross-sectional data shows systematic differences in the expenditure structure across income groups. This paper presents a growth model which is consistent with (i)-(iv) at the same time, a result the existing literature has not been able to generate. The theory is simple and parsimonious and contains an analytical solution. The model's functional form and cross-sectional data are exploited to estimate the relative importance of price and income effects as determinants of the structural change.

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File URL: https://economicdynamics.org/meetpapers/2013/paper_217.pdf
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Paper provided by Society for Economic Dynamics in its series 2013 Meeting Papers with number 217.

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Date of creation: 2013
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Handle: RePEc:red:sed013:217
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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