Investment Demand and Structural Change

We study the joint evolution of sectoral composition and investment rate developing economies. Using panel data for several countries in different stages development, we document three novel facts: (a) share industry are strongly correlated follow a hump?shaped profile with (b) goods contain more domestic value added from less services than consumption do, (c) differs one GDP. build multi?sector growth model to fit these patterns provide two important results. First, demand explains half hump development. Second, asymmetric productivity helps explain decline relative price along development path, which turn increases capital accumulation promotes growth.