The Rise of Services and Balanced Growth in Theory and Data

Miguel Leon-Ledesma and Alessio Moro

No 1714, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: When measured using NIPA conventions, a two-sector model of balanced growth and structural transformation can account for the mildly declining GDP growth rate, increasing share of services, and increasing real investment/GDP ratio observed in the post-war U.S. economy. These changes induce a decline of 36% in the marginal product of capital and of 5.4% in the real interest rate. By retaining the U.S. calibration, the process of structural transformation can also account, per-se, for cross-country differences in real investment/GDP ratios, which are comparable to those displayed by the U.S. along its growth path.

Keywords: Structural transformation; Productivity of capital. Two-sector model (search for similar items in EconPapers)
JEL-codes: E22 E24 E31 O41 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2017-04
New Economics Papers: this item is included in nep-gro and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.centreformacroeconomics.ac.uk/Discussio ... MDP2017-14-Paper.pdf (application/pdf)

Related works:
Journal Article: The Rise of Services and Balanced Growth in Theory and Data (2020)
Working Paper: The Rise of Services and Balanced Growth in Theory and Data (2018)
Working Paper: The rise of services and balanced growth in theory and data (2017)
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:cfm:wpaper:1714

Access Statistics for this paper

More papers in Discussion Papers from Centre for Macroeconomics (CFM) Contact information at EDIRC.
Bibliographic data for series maintained by Helen Power ().