The Structural Transformation Between Manufacturing and Services and the Decline in the US GDP Volatility

Alessio Moro

Review of Economic Dynamics, 2012, vol. 15, issue 3, 402-415

Abstract: I construct a two-sector growth model to study the effect of the structural transformation between manufacturing and services on the decline in GDP volatility in the US. In the model, a change in the relative size of the two sectors affects the transmission mechanism that relates sectoral TFP shocks to endogenous variables. I calibrate the model to the US and show that, for given stochastic sectoral TFP processes in manufacturing and services, structural change generates a decline in the volatility of both aggregate TFP and GDP, in the volatility of each broad component of GDP (manufacturing consumption, services consumption and investment) and in the volatility of labor. Numerical results suggest that the structural transformation can account for 28% of the reduction in the US GDP volatility between the periods 1960-1983 and 1984-2005. (Copyright: Elsevier)

Keywords: GDP volatility; Structural change; Real business cycle; Total factor productivity (search for similar items in EconPapers)
JEL-codes: C67 C68 E25 E32 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65)

Downloads: (external link)
http://dx.doi.org/10.1016/j.red.2011.09.005
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.

Related works:
Software Item: Code and data files for "The Structural Transformation Between Manufacturing and Services and the Decline in the US GDP Volatility" (2011)
Working Paper: The structural transformation between manufacturing and services and the deline in the U.S. GDP volatility (2009)
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:red:issued:10-123

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/j.red.2011.09.005

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().