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...

In a multi-industry growth model, firms require external funds to conduct productivityenhancing R&D, and face financing constraints. The cost of research differs across industries, so that financing constraints hinder productivity growth in some industries more than in others. Equilibrium industry dynamics map into a differences-indifferences regression specification where industry growth depen...

Policy-makers and the public, it has famously been said [Brooks, 1986], are more interested in the possibility of non-linear dislocations and surprises in the behavior of the environment than in smooth extrapolations of current trends. How indeed should we design our models to generate environmental foresight, to detect, in particular, threats to our environment lying “just beyond the horizon”?...

From about the mid 1980s, Australia has sought to improve the performance of its markets and industries by actively implementing a program of microeconomic reform. It was recognised that there was a plethora of distortions which had the effect of promoting inefficient performance, and the reform program was directed towards removing these distortions. These reforms held the promise of significa...

The transition to market-based economic systems in the countries of Central and Eastern Europe and the former Soviet Union involves fundamental shifts in the allocation of resources and deep changes in the structure of production and employment. This paper uses a simple model of economic development and structural change with technology spillovers to benchmark structural change in the transitio...

abstract successful presence of indian and pakistani rice in iran’s market due to having similar quality with the domestic rice, extensive advertisement, and good packaging has faced rice production in iran with a big challenge. assuming that the attractions of iranian consumers toward these imported rice varieties are a signal of changes in the preferences of the domestic consumers in favor of...

This paper considers the joint problem of model estimation and implementation of monetary policy in the face of uncertainty regarding the process of structural change in the economy. We model unobserved structural change through time variation in the natural rates of interest and unemployment. We show that certainty equivalent optimal policies perform poorly when there is model uncertainty abou...