Structural Change and Generalized Balanced Growth

Balanced Growth with Structural Change∗

We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of a balanced aggregate growth path, with all aggregates growing at the same rate, and structural change, characterized by sectoral labor reallocation. The conditions needed are weak restrictions on the utility and production functions: goods should be...

Globalization, structural change and productivity growth

One of the earliest and most central insights of the literature on economic development is that development entails structural change. The countries that manage to pull themselves out of poverty and get richer are those that are able to diversify away from agriculture and other traditional products. As labour and other resources move from agriculture into modern economic activities, overall pro...

Generalized Balanced Stochastic Truncation

A modification of the Balanced Stoc1insiti.c Truncation method fqr relative error model reduction is introduced. The method is based on replac~ng the truncat~on step w ~ t h a generalized s~iigular pertmbat~on approxlmatlon. The new method is shown to satisfy an infinity norm bound on the relative error between the full order and the reduced order models. The discrete time balaiiced stochastic ...

Testing the growth effects of structural change

Against the backdrop of Baumol’s model of ‘unbalanced growth’, a recent strand of literature has presented models that manage to reconcile structural change with Kaldor’s ‘stylized fact’ of the relative constancy of per-capita GDP growth. Another strand of literature goes beyond this, arguing that the expenditure shifts toward Baumol’s ‘stagnant’ sector stimulate rather than dampen long-term ec...

Growth and Structural Change: Trends, Patterns and Policy Options