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| Author: | Buera, F.J. Kaboski, J.P. |
| Title: | Can traditional theories of structural change fit the data? |
| Journal: | Journal of the European Economic Association
2009 : APR-MAY, VOL. 7:2-3, p. 469-477 |
| Index terms: | structural change theories models |
| Language: | eng |
| Abstract: | There are two traditional explanations for structural changes: sector-biased technological progress and non-homothetic preferences. This article integrates both into an otherwise standard growth model and it also quantitatively evaluates them vis-a-vis time series. The exercise identifies a set of puzzles for standard theories. First of all, the model cannot account for the steep decline in manufacturing and rise in services in the later data. Secondly, the model requires implausibly low elasticity of substitution across goods to match the consumption and output data. Finally, the behavior of consumption and output shares differs significantly from that of employment shares. |
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