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A geometrical approach to structural change modelling

Denis Stijepic ()

Structural Change and Economic Dynamics, 2015, vol. 33, issue C, 71-85

Abstract: A large body of research has studied structural change, particularly the dynamics of labour allocation in multi-sector growth models, based on different economic theories. We present a meta-model of structural change that combines information from empirical evidence (stylized facts) with information on the geometrical properties of typical trajectories studied in structural change theory. In particular, our approach is based on three facts: (1) structural change in three-sector models is defined on a 2-simplex; (2) the trajectory of past structural change partitions the 2-simplex into economically interpretable sections; (3) the typical properties of structural change trajectories (e.g. non-self-intersection) prohibit some movements from one section to another. Jointly, these facts imply that structural change is path-dependent and that the number of feasible structural change scenarios can be reduced significantly. While we focus on labour allocation dynamics, our approach can be applied to other topics (e.g. income distribution dynamics).

Keywords: Structure; Dynamics; Geometrical; Simplex; Path dependency (search for similar items in EconPapers)
JEL-codes: C61 C65 O41 (search for similar items in EconPapers)
Date: 2015
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