Sectoral Technology and Structural Transformation

Berthold Herrendorf, Akos Valentinyi and Christopher Herrington

No 9386, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper assesses how structural transformation is affected by sectoral differences in labor-augmenting technological progress, capital intensity, and substitutability between capital and labor. We estimate CES production functions for agriculture, manufacturing, and services on postwar US data and compare them with Cobb--Douglas production functions with different and with equal capital shares. We find that sectoral differences in labor-augmenting technological progress are the dominant force behind changes in sectoral labor and in relative prices. As a result, Cobb--Douglas production functions with equal capital shares (which by construction abstract from differences in capital intensity and the elasticity of substitution) capture the main economic forces on the technology side behind postwar US structural transformation.

Keywords: Ces production function; Cobb-douglas production function; Elasticity of substitution; Structural transformation (search for similar items in EconPapers)
JEL-codes: O11 O14 (search for similar items in EconPapers)
Date: 2013-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
https://cepr.org/publications/DP9386 (application/pdf)

Related works:
Journal Article: Sectoral Technology and Structural Transformation (2015)
Working Paper: Sectoral Technology and Structural Transformation (2013)
Working Paper: Sectoral Technology and Structural Transformation (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:9386

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP9386

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().