A Simple Theory of Structural Transformation
نویسنده
چکیده
The paper presents a theory of the industrial transformation amongst sectors along the balanced growth path equilibrium, using endogenous growth theory. Allowing only a slight upward trend in the productivity of the human capital sector, combined with ascending degrees of human capital shares of sectoral output, in say, agriculture, manufacturing and services, output gradually shifts relatively over time from agriculture to manufacturing and to services. Abstracting from international trade theory, sectors intensive in the factor that is becoming relatively more plentiful nd their relative outputs expanding. Adding more sectors of greater human capital intensity causes labor time to decrease within each sector, as shown for agriculture, and in general for any number of sectors. The number of sectors is also allowed to depend endogenously on the human capital productivity level. JEL Classi cation: E25, F11, J24, O14
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