Structural Change in a Multi-Sector Model of Growth

Liwa Rachel Ngai () and Christopher A Pissarides ()

No 1800, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of structural change, characterized by sectoral labor reallocation, and balanced aggregate growth. The conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists. Per capita output grows at the rate of labor-augmenting technological progress in the capitalproducing sector and employment moves to low-growth sectors. In the limit all employment converges to two sectors, the slowest-growing consumption-goods sector and the capitalgoods sector.

Keywords: multi-sector growth; structural change; balanced growth; sectoral employment; unbalanced growth (search for similar items in EconPapers)
JEL-codes: O41 O14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-dge
Date: Written 2005-10
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Related works:
Working Paper: Structural Change in a Multi-Sector Model of Growth (2004)
Journal Article: Structural Change in a Multisector Model of Growth (2007)
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