Technological Progress, Factor Endowments and Structural Change:A Note

M.G. Quibria () and T.N. Srinivasan

MPRA Paper from University Library of Munich, Germany

Abstract: Economic development is accompanied by structural change. The trade theoretic literature offers two major hypotheses – i. e., the factor-endowment and the total-factor-productivity-- for explaining the stylized facts of structural change. This note revisits these hypotheses. In particular, it explores, with the help of a simple geometric apparatus, the analytical implications of the two hypotheses and draws out their striking similarities. It argues that although the literature has treated these two hypotheses as distinctly different, they are indeed analytically equivalent in the sense that they are both based on a similar type of shifts in the production functions. An important implication of this analytical equivalence is that, compounded with the data problems, it makes the task of empirical testing and discriminating between the two alternative hypotheses virtually impossible.

Keywords: nontraded good; technological progress; total-factor-productivity; factor endowment; and economic growth (search for similar items in EconPapers)
JEL-codes: F11 O12 O30 O40 (search for similar items in EconPapers)
Date: 2010-07
New Economics Papers: this item is included in nep-eff
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Published in Bangladesh Development Studies Number 4.32(2009): pp. 95-103

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Journal Article: Technological Progress, Factor Endowments and Structural Change: A Note (2009)
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