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- Title
Structural change and non-constant biased technical change.
- Authors
Cruz, Edgar
- Abstract
Empirical evidence suggests that the differences in rates of technical progress across sectors are time-variant, implying that the bias in technological change is not constant. In this paper, we analyze the implications of this non-constant sectoral biased technical change for structural change and we assess whether this is an important factor behind structural transformations. To this end, we develop a multi-sectoral growth model where TFP growth rates across sectors are non-constant. We calibrate our model to match the development of the U.S. economy during the twentieth century. Our findings show that, by assuming non-constant biased technical change, a purely technological approach is able to replicate the sectoral transformations in the U.S. economy not only after but also prior to World War II.
- Subjects
UNITED States; BAUMOL'S cost disease (Economics); ECONOMIC models; ECONOMIC development; 20TH century United States economy; TECHNOLOGICAL progress
- Publication
B.E. Journal of Macroeconomics, 2017, Vol 17, Issue 2, p1
- ISSN
2194-6116
- Publication type
Article
- DOI
10.1515/bejm-2015-0046