 What causes structural change?Peter Warr and Arief Anshory Yusuf Oxford Review of Economic Policy, 2025, vol. 41, issue 2, 358-376 Abstract: Structural change refers to long-term, systematic changes in the sectoral composition of aggregate economic output. Ordinarily, it means the contraction of agriculture relative to industry and services. We analyse its economic causes, using a small, comparative-static, empirically-based computable general equilibrium model of the economy of Thailand. Rapid structural change has occurred in that country over recent decades. We test the explanatory power of five potential contributors to structural change, suggested by simple economic theory and relevant literature: (a) differential growth rates of aggregate supplies of physical capital, labour, and land (the Rybczynski effect); (b) differential growth rates of total factor productivity between sectors; (c) changes in relative international prices; (d) changes in sectoral rates of trade protection; and (e) income growth with differences in expenditure elasticities of demand between final consumer goods (Engel's law). It is concluded that, in Thailand's case, explanation (b) dominates the other four. Keywords: structural change; Thailand; Engel's law; Rybczynski effect (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:oxford:v:41:y:2025:i:2:p:358-376. Access Statistics for this article Oxford Review of Economic Policy is currently edited by Christopher Adam More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited |
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