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The Natural Rate of Structural Change


  • Francisco Buera

    (Washington University at St. Louis)

  • Joseph Kaboski

    (University of Notre Dame)

  • Marti Mestieri

    (Northwestern University)


Abstract Can the changes in the structure of consumption and production be described by a stable and parsimoneous model? Are there important deviations from these benchmark trends for subsets of countries and periods? We develop a generalized model of structural change that jointly considers the demand and production sides to answer these questions. Production is generalized to allow for time-varying factor shares and rich productivity dynamics. Demand is generalized to allow for persistent non-homotheticities and independent price elasticities. We estimate the model using data on sectoral value-added, capital and labor allocations, price indexes, and income per capita in a large panel of 39 countries.

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  • Francisco Buera & Joseph Kaboski & Marti Mestieri, 2018. "The Natural Rate of Structural Change," 2018 Meeting Papers 1279, Society for Economic Dynamics.
  • Handle: RePEc:red:sed018:1279

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