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Structural transformations and cumulative causation towards an evolutionary micro-foundation of the Kaldorian growth model

André Lorentz, Tommaso Ciarli, Maria Savona () and Marco Valente

No 2022-001, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: We derive the Kaldorian cumulative causation mechanism as an emergent property of the dynamics generated by a micro-founded model. We build on an evolutionary growth model which formalises the endogenous relations between structural changes in the production, organisation and functional composition of employment and of consumption patterns (originally proposed by Ciarli et al, 2010). We discuss the main transition dynamics to a self- sustained growth regime in a two-stage growth pattern generated through the numerical simulations of the model. We then show that these mechanisms lead to the emergence of a Kaldor-Verdoorn law. Finally we show that the structure of demand shapes the type of growth regime emerging from the endogenous structural changes, fostering or hampering the emergence of the Kaldor Verdoorn law. This depends on the endogenous income distribution and heterogeneity in consumption behaviour

Keywords: Structural change; economic growth; final consumption; technological change; cumulative causation; evolutionary economics; Kaldor-Verdoorn Law (search for similar items in EconPapers)
JEL-codes: C63 E11 L16 O14 O33 O41 (search for similar items in EconPapers)
Date: 2022-01-10
New Economics Papers: this item is included in nep-evo, nep-gro, nep-hme, nep-ino, nep-mac, nep-ore, nep-pke and nep-tid
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Related works:
Working Paper: Structural Transformations and Cumulative Causation: Towards an Evolutionary Micro-foundation of the Kaldorian Growth Model (2019) Downloads
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