Structural Change in a Multi-Sector Model of Growth

Christopher Pissarides and L. Rachel Ngai

No 4763, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of structural change, characterized by sectoral labour reallocation, and constant aggregate growth path. The conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists. We present evidence from US two-digit industries that is consistent with our predictions about structural change and successfully calibrate the historical shift from agriculture to manufacturing and services. We show quantitatively that reasonable deviations from our conditions do not have a big impact on the properties of the model.

Keywords: Structural change; Unbalanced growth; Multi-sector growth; Sectoral employment (search for similar items in EconPapers)
JEL-codes: O14 O41 (search for similar items in EconPapers)
Date: 2004-11
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (68)

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Related works:
Journal Article: Structural Change in a Multisector Model of Growth (2007)
Working Paper: Structural change in a multi-sector model of growth (2007)
Working Paper: Structural change in a multi-sector model of growth (2005)
Working Paper: Structural Change in a Multi-Sector Model of Growth (2005)
Working Paper: Structural change in a multi-sector model of growth (2004)
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