The Rise of Services and Balanced Growth in Theory and Data

Miguel Leon-Ledesma and Alessio Moro

No 1714, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: When measured using NIPA conventions, a two-sector model of balanced growth and structural transformation can account for the mildly declining GDP growth rate, increasing share of services, and increasing real investment/GDP ratio observed in the post-war U.S. economy. These changes induce a decline of 36% in the marginal product of capital and of 5.4% in the real interest rate. By retaining the U.S. calibration, the process of structural transformation can also account, per-se, for cross-country differences in real investment/GDP ratios, which are comparable to those displayed by the U.S. along its growth path.

Keywords: Structural transformation; Productivity of capital. Two-sector model (search for similar items in EconPapers)
JEL-codes: E22 E24 E31 O41 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2017-04
New Economics Papers: this item is included in nep-gro and nep-mac
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The Rise of Services and Balanced Growth in Theory and Data (2020)
Working Paper: The Rise of Services and Balanced Growth in Theory and Data (2018)
Working Paper: The rise of services and balanced growth in theory and data (2017)
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