Structural Change, Accumulation and Growth in Developing Economies

John Landon-Lane () and Peter E. Robertston

No 129, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: Historically, episodes of rapid growth are accompanied by significant structural change. In this paper we therefore aim to quantify the extent to which factor accumulation induces structural change and productivity growth in industrializing economies. We present an extension of a standard growth model that incorporates two sectors, traditional and modern, and an endogenous wage gap, due to efficiency wages. We quantify the model using a panel of 78 countries over the post war era. The results show that these labour reallocation effects are significant and can increase the effective return to physical capital by around 30% in many countries.

Keywords: growth; development; endogenous growth; dual economy; convergence (search for similar items in EconPapers)
JEL-codes: O0 O1 O3 (search for similar items in EconPapers)
Date: 2003-06-04
New Economics Papers: this item is included in nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:ecj:ac2003:129

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