Supply Side Structural Change

Date
2013-01-01
Authors
Cordoba, Juan Carlos
Journal Title
Journal ISSN
Volume Title
Publisher
Altmetrics
Authors
Research Projects
Organizational Units
Economics
Organizational Unit
Journal Issue
Series
Abstract

The interest rate and the rate of economic growth are often regarded as roughly constant as economies grow. Moreover, the share of agriculture in production and the share of rural population typically shrink. We show that an otherwise standard growth model that includes a backward and an advanced sector can account for these regularities. The mechanism works as follows: as the economy accumulates capital, labor flows from the backward sector to the advanced one. This migration prevents the usual diminishing marginal returns of capital. As a result, the interest rate and the growth rate of the economy remain constant during the transition to the steady state.

Description

This is a working paper of an article from Eurasian Economic Review 3 (2013): 8, doi:10.14208/BF03353839. The final publication is available at Springer via http://dx.doi.org/10.14208/BF03353839.

Keywords
growth, structural change, urbanization, choice of techniques, productivity
Citation
DOI
Collections