Structural Change in a Multisector Model of Growth

L. Rachel Ngai and Christopher Pissarides

American Economic Review, 2007, vol. 97, issue 1, 429-443

Abstract: We study a multisector 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. Along the balanced growth path, labor employed in the production of consumption goods gradually moves to the sector with the lowest TFP growth rate, until in the limit it is the only sector with nontrivial employment of this kind. The employment shares of intermediate and capital goods remain constant during the reallocation process. (JEL O41)

Date: 2007
Note: DOI: 10.1257/aer.97.1.429
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Citations: View citations in EconPapers (737)

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Related works:
Working Paper: Structural change in a multi-sector model of growth (2007)
Working Paper: Structural change in a multi-sector model of growth (2005)
Working Paper: Structural Change in a Multi-Sector Model of Growth (2005)
Working Paper: Structural Change in a Multi-Sector Model of Growth (2004)
Working Paper: Structural change in a multi-sector model of growth (2004)
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