Conformism and Structural Change

Takeo Hori (), Masako Ikefuji and Kazuo Mino
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Takeo Hori: Aoyamagakuin University

No 825, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: We study structural change in a simple, two-sector endogenous growth model and show that the presence of commodity-specific consumption externalities can be a source of structural change. When the degrees of consumption externalities are different between different goods, the two sectors grow at different rates, whereas the aggregate economy exhibits balanced growth in the sense that capital stock and expenditure grow at the same constant rate. Under the more restrictive condition such that the degrees of consumption externalities are the same, structural change does not occur. We also show that the dependence of the benchmark consumption levels on the past consumption is crucial for the divergent patterns of structural change across countries.

Keywords: Structural change; Consumption externalities; Two-sector growth model; Kaldor facts (search for similar items in EconPapers)
JEL-codes: E21 E30 O10 O41 (search for similar items in EconPapers)
Pages: 27pages
Date: 2012-06
New Economics Papers: this item is included in nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://www.kier.kyoto-u.ac.jp/DP/DP825.pdf (application/pdf)

Related works:
Journal Article: CONFORMISM AND STRUCTURAL CHANGE (2015)
Working Paper: Conformism and Structural Change (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:kyo:wpaper:825

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