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Sectoral Specialisation and Growth Rate DIfferences Among Integrated Economies

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  • André Lorentz

Abstract

This paper analyses the sectoral specialisation mechanisms and their effects on growth rate differences providing an alternative approach to endogenous growth processes. The framework developed relies on a Kaldorian growth model with evolutionary micro-founded technical change. The paper develops a multi-sectoral growth model. Following the Kaldorian tradition economic growth is here driven by the aggregate demand dynamics, constrained by the balance of payment. Aggregate demand dynamics is function of foreign income dynamics and of the economies relative competitiveness, defined at the micro-level through technical change dynamics. Technical change modelling follows the evolutionary literature on growth and industrial dynamics. Firms production techniques are build on the accumulation of capital vintages. These are developed by firms through their R&D activity. The outcome of their R&D activity is stochastic. Firms and therefore economies are subject to selection mechanisms through sector-wide replicator dynamics. This framework is used to address the following issues: First, we investigate the conditions for sectoral specialisation to emerge from the dynamics generated by the model. These mechanisms are linked to the interaction between the uneven technical change among sectors and economies generated at the micro-level and the macro-framework. Second, the paper investigates the relationship between specialisation patterns and growth rate differences among economies

Suggested Citation

  • André Lorentz, 2004. "Sectoral Specialisation and Growth Rate DIfferences Among Integrated Economies," Computing in Economics and Finance 2004 165, Society for Computational Economics.
  • Handle: RePEc:sce:scecf4:165
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    References listed on IDEAS

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    1. Silverberg, Gerald & Verspagen, Bart, 1995. "An Evolutionary Model of Long Term Cyclical Variations of Catching Up and Falling Behind," Journal of Evolutionary Economics, Springer, vol. 5(3), pages 209-227, September.
    2. Patrick Llerena & André Lorentz, 2003. "Alternative Theories on Economic Growth and the Co-evolution of Macro-Dynamics and Technological Change: A survey," LEM Papers Series 2003/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-1255, December.
    4. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    5. Dalum, Bent & Laursen, Keld & Verspagen, Bart, 1999. "Does Specialization Matter for Growth?," Industrial and Corporate Change, Oxford University Press, vol. 8(2), pages 267-288, June.
    6. Marco Valente, 1998. "Laboratory for Simulation Development," DRUID Working Papers 98-5, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    7. Patrick Llerena & Andre' Lorentz, 2003. "Cumulative Causation and Evolutionary Micro-Founded Technical Change: A Growth Model with Integrated Economies," LEM Papers Series 2003/05, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    8. G. Silverberg & B. Verspagen, 1995. "Evolutionary Theorizing on Economic Growth," Working Papers wp95078, International Institute for Applied Systems Analysis.
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    Cited by:

    1. Patrick Llerena & André Lorentz, 2004. "Cumulative Causation and Evolutionary Micro-Founded Technical Change. On the Determinants of Growth rate Differences," Revue économique, Presses de Sciences-Po, vol. 55(6), pages 1191-1214.

    More about this item

    Keywords

    Sectoral Specialisation; Technical Change; Economic Growth; Evolutionary Modelling;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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