Knowledge-based structural change
Kevin Genna,
Christian Ghiglino,
Kazuo Nishimura and
Alain Venditti ()
Additional contact information
Kevin Genna: Institut Louis Bachelier
Christian Ghiglino: University of Essex
Alain Venditti: Aix-Marseille University
Economic Theory, 2024, vol. 78, issue 4, No 9, 1333-1388
Abstract:
Abstract How will structural change unfold beyond the rise of services? Motivated by the observed dynamics within the service sector we propose a model of structural change in which productivity is endogenous and output is produced with two intermediate substitutable capital goods. In the productive sector the accumulation of specialized skills leads to an unbounded increase in TFP, as sector becoming asymptotically dominant. We are then able to recover the increasing shares of workers, the increasing real and nominal shares of the output observed in productive service and IT sectors in the US. Interestingly, the economy follows a growth path converging to a particular level of wealth that depends on the initial price of capital and knowledge. As a consequence, countries with the same fundamentals but lower initial wealth will be characterized by lower asymptotic wealth.
Keywords: Two-sector model; Technological knowledge; Constant elasticity of substitution; non-balanced endogenous growth; Structural change; Kaldor and Kuznets facts (search for similar items in EconPapers)
JEL-codes: C62 E21 E22 E23 O41 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Knowledge-based structural change (2024)
Working Paper: Knowledge-Based Structural Change (2021) 
Working Paper: Knowledge-Based Structural Change (2021) 
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DOI: 10.1007/s00199-024-01587-4
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