IDEAS home Printed from https://ideas.repec.org/a/kap/jeczfn/v123y2018i3d10.1007_s00712-017-0555-3.html
   My bibliography  Save this article

Endogenous sector-biased technical change and perpetual and transient structural change

Author

Listed:
  • Pengfei Zhang

    (Peking University)

Abstract

This paper provides a new definition of structural change and then categorizes such changes into two types. Transient structural change is related to the short-term adjustment of sectoral labor employment, while perpetual structural change concerns the long-run trends of labor reallocation among sectors. If we focus on supply-side reasons, we find that the one and only fundamental driving force of perpetual structural change is sector-biased technical change. We also investigate the structural parameters of the model that determine the direction of sector-biased technical change.

Suggested Citation

  • Pengfei Zhang, 2018. "Endogenous sector-biased technical change and perpetual and transient structural change," Journal of Economics, Springer, vol. 123(3), pages 195-223, April.
    • Handle: RePEc:kap:jeczfn:v:123:y:2018:i:3:d:10.1007_s00712-017-0555-3
    DOI: 10.1007/s00712-017-0555-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00712-017-0555-3
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1007/s00712-017-0555-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Herrendorf, Berthold & Valentinyi, Ákos, 2022. "Endogenous sector–biased technological change and industrial policy," Economic Modelling, Elsevier, vol. 113(C).
    2. Timo Boppart & Franziska J. Weiss, 2013. "Non-homothetic preferences and industry directed technical change," ECON - Working Papers 123, Department of Economics - University of Zurich.
    3. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 129-173.
    4. Meckl, Jürgen, 1999. "Structural change and generalized balanced growth," Discussion Papers, Series I 298, University of Konstanz, Department of Economics.
    5. King, Robert G & Rebelo, Sergio T, 1993. "Transitional Dynamics and Economic Growth in the Neoclassical Model," American Economic Review, American Economic Association, vol. 83(4), pages 908-931, September.
    6. Timo Boppart, 2014. "Structural Change and the Kaldor Facts in a Growth Model With Relative Price Effects and Non‐Gorman Preferences," Econometrica, Econometric Society, vol. 82, pages 2167-2196, November.
    7. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    8. Robert J. Barro & Xavier Sala-i-Martin, 2003. "Economic Growth, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262025531, December.
    9. Daron Acemoglu & Fabrizio Zilibotti, 2001. "Productivity Differences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 563-606.
    10. Wallis, Patrick & Colson, Justin & Chilosi, David, 2016. "Puncturing the Malthus delusion: structural change in the British economy before the industrial revolution, 1500-1800," Economic History Working Papers 66816, London School of Economics and Political Science, Department of Economic History.
    11. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    12. Takeo Hori & Masako Ikefuji & Kazuo Mino, 2015. "Conformism And Structural Change," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56, pages 939-961, August.
    13. Foellmi, Reto & Zweimüller, Josef, 2008. "Structural change, Engel's consumption cycles and Kaldor's facts of economic growth," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1317-1328, October.
    14. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Economic Integration and Endogenous Growth," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 1, pages 3-32, World Scientific Publishing Co. Pte. Ltd..
    15. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1055-1089.
    16. Kiley, Michael T, 1999. "The Supply of Skilled Labour and Skill-Biased Technological Progress," Economic Journal, Royal Economic Society, vol. 109(458), pages 708-724, October.
    17. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 869-882.
    18. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    19. Daron Acemoglu, 2002. "Directed Technical Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 781-809.
    20. Rachel Ngai & Roberto Samaniego, 2011. "Accounting for Research and Productivity Growth Across Industries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 475-495, July.
    21. H. Uzawa, 1961. "Neutral Inventions and the Stability of Growth Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 28(2), pages 117-124.
    22. Daron Acemoglu & Veronica Guerrieri, 2008. "Capital Deepening and Nonbalanced Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 467-498, June.
    23. Mathias Thoenig & Thierry Verdier, 2003. "A Theory of Defensive Skill-Biased Innovation and Globalization," American Economic Review, American Economic Association, vol. 93(3), pages 709-728, June.
    24. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    25. Kuznets, Simon, 1973. "Modern Economic Growth: Findings and Reflections," American Economic Review, American Economic Association, vol. 63(3), pages 247-258, June.
    26. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    27. Francesco Caselli & Wilbur John Coleman II, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June.
    28. Gene M. Grossman & Elhanan Helpman, 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 23-44, Winter.
    29. Bonatti, Luigi & Felice, Giulia, 2008. "Endogenous growth and changing sectoral composition in advanced economies," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 109-131, June.
    30. Felice, Giulia, 2016. "Size and composition of public investment, sectoral composition and growth," European Journal of Political Economy, Elsevier, vol. 44(C), pages 136-158.
    31. Charles I. Jones & Dean Scrimgeour, 2008. "A New Proof of Uzawa's Steady-State Growth Theorem," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 180-182, February.
    32. Berthold Herrendorf & Richard Rogerson & ?kos Valentinyi, 2013. "Two Perspectives on Preferences and Structural Transformation," American Economic Review, American Economic Association, vol. 103(7), pages 2752-2789, December.
    33. Kamihigashi, Takashi, 2001. "Necessity of Transversality Conditions for Infinite Horizon Problems," Econometrica, Econometric Society, vol. 69(4), pages 995-1012, July.
    34. Luigi Bonatti & Giulia Felice, 2010. "Trade And Growth In A Two‐Country Model With Home Production And Uneven Technological Spillovers," Manchester School, University of Manchester, vol. 78(5), pages 484-509, September.
    35. Justin Yifu Lin & Pengfei Zhang, 2007. "Development Strategy, Optimal Industrial Structure and Economic Growth in Less Developed Countries," Development Economics Working Papers 22710, East Asian Bureau of Economic Research.
    36. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    37. F. A. Lutz, 1961. "The Theory of Capital," International Economic Association Series, Palgrave Macmillan, number 978-1-349-08452-4 edited by D. C. Hague, June.
    38. Francesco Caselli & Wilbur John Coleman II, 2001. "The U.S. Structural Transformation and Regional Convergence: A Reinterpretation," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 584-616, June.
    39. Alessio Moro, 2015. "Structural Change, Growth, and Volatility," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(3), pages 259-294, July.
    40. Nicholas Kaldor, 1961. "Capital Accumulation and Economic Growth," International Economic Association Series, in: D. C. Hague (ed.), The Theory of Capital, chapter 0, pages 177-222, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pengfei Zhang, 2023. "Endogenous capital-augmenting R&D, intersectoral labor reallocation, and the movement of the labor share," Journal of Economics, Springer, vol. 140(1), pages 1-36, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Comunale, Mariarosaria & Felice, Giulia, 2022. "Trade and structural change: An empirical investigation," International Economics, Elsevier, vol. 171(C), pages 58-79.
    2. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    3. Kevin Genna & Christian Ghiglino & Kazuo Nishimura & Alain Venditti, 2024. "Knowledge-based structural change," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(4), pages 1333-1388, December.
    4. KUROSE, Kazuhiro, 2015. "The Structure of the Models of Structural Change and Kaldor's Facts: A Critical Survey," CCES Discussion Paper Series 59, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    5. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    6. Manuel García‐Santana & Josep Pijoan‐Mas & Lucciano Villacorta, 2021. "Investment Demand and Structural Change," Econometrica, Econometric Society, vol. 89(6), pages 2751-2785, November.
    7. Herrendorf, Berthold & Valentinyi, Ákos, 2022. "Endogenous sector–biased technological change and industrial policy," Economic Modelling, Elsevier, vol. 113(C).
    8. Alonso-Carrera, Jaime & Raurich, Xavier, 2015. "Demand-based structural change and balanced economic growth," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 359-374.
    9. Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2015. "Endowment structures, industrial dynamics, and economic growth," Journal of Monetary Economics, Elsevier, vol. 76(C), pages 244-263.
    10. van Neuss, Leif, 2018. "Globalization and deindustrialization in advanced countries," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 49-63.
    11. Alonso-Carrera, Jaime & Raurich, Xavier, 2018. "Labor mobility, structural change and economic growth," Journal of Macroeconomics, Elsevier, vol. 56(C), pages 292-310.
    12. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    13. Felice, Giulia, 2016. "Size and composition of public investment, sectoral composition and growth," European Journal of Political Economy, Elsevier, vol. 44(C), pages 136-158.
    14. Jaime Alonso-Carrera & Giulia Felice & Xavier Raurich, 2018. "Inequality and Structural Change under Non-Linear Engels' Curve," UB School of Economics Working Papers 2018/374, University of Barcelona School of Economics.
    15. Afolabi Tunde Ahmed & Tsimisaraka Raymondo Sandra Marcelline & Sabi Couscous Mouhamadou Nazirou, 2021. "Empirical Study of the Impact of Governance on Economic Structural Change: Evidence from Sub-Saharan African Countries," International Journal of Science and Business, IJSAB International, vol. 5(8), pages 260-277.
    16. Justin Yifu Lin & Pengfei Zhang, 2007. "Development Strategy, Optimal Industrial Structure and Economic Growth in Less Developed Countries," Development Economics Working Papers 22710, East Asian Bureau of Economic Research.
    17. Mariarosaria Comunale & Giulia Felice, 2019. "An empirical investigation of the relationship between trade and structural change," Bank of Lithuania Working Paper Series 62, Bank of Lithuania.
    18. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170, Elsevier.
    19. Cynthia Armas & Fernando Sánchez-Losada, 2021. "Structural change and the income of nations," UB School of Economics Working Papers 2021/412, University of Barcelona School of Economics.
    20. Margarida Duarte & Diego Restuccia, 2020. "Relative Prices and Sectoral Productivity," Journal of the European Economic Association, European Economic Association, vol. 18(3), pages 1400-1443.

    More about this item

    Keywords

    Aggregate balanced growth; Biased technology; Non-balanced sectoral growth; R&D resources; Structural change;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jeczfn:v:123:y:2018:i:3:d:10.1007_s00712-017-0555-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.