Structural Change, Aggregate Growth And Government Services

Denis Stijepic and Helmut Wagner

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: Recent literature studies structural change and aggregate dynamics in neoclassical multi-sector growth models. A central aspect of this literature is the explanation of Kaldor-Kuznets-stylized-facts , which state that massive structural change takes place while aggregate-dynamics are relatively stable in the long-run. We present a growth model analysing the role of government in structural change and aggregate growth. We show that, besides distortionary effects on the sector structure, the provision of government services has an impact on the intertemporal elasticity of substitution of the representative household and, thus, on aggregate dynamics. These results can be used to explain the Kaldor-Kuznets-facts.

JEL-codes: O14 O38 O41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cse and nep-gro
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112904

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