A unified theory of structural change

Dolores Guilló, María; Papageorgiou, Chris; Pérez-Sebastián, Fidel

Abstract

This paper uses dynamic general equilibrium and computational methods, inspired by the multi-sector growth model structure in Stephen Turnovsky's work, to develop a theory that unifies two of the traditional explanations of structural change: sector-biased technical change and non-homothetic preferences. The theory is based on an overlapping-generations growth model with endogenous technical change and non-homothetic preferences. An expanding-variety setup with two different R&D technologies, agricultural, and non-agricultural, is employed. The analysis, based on numerical simulations, shows that the biased technical change hypothesis finds most support in the data. It also points to production-side specific factors, such as asymmetries in cross-sector knowledge spillovers, as explanatory factors of the bias in technical change.

Citation

Dolores Guilló, M., Papageorgiou, C., & Pérez-Sebastián, F. (2011). A unified theory of structural change. Journal of Economic Dynamics and Control, 35(9), 1393-1404. https://doi.org/10.1016/j.jedc.2011.05.004

• Journal Article Type: Article
• Acceptance Date: Apr 22, 2011
• Online Publication Date: May 13, 2011
• Publication Date: 2011-09
• Deposit Date: Nov 13, 2014
• Journal: Journal Of Economic Dynamics & Control
• Print ISSN: 0165-1889
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 35
• Issue: 9
• Pages: 1393-1404
• DOI: https://doi.org/10.1016/j.jedc.2011.05.004
• Keywords: Economics and Econometrics; Control and Optimization; Applied Mathematics
• Public URL: https://hull-repository.worktribe.com/output/469517
• Contract Date: Nov 13, 2014