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Technological Progress, Factor Endowments and Structural Change:A Note

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  • Quibria, M.G
  • Srinivasan, T.N.

Abstract

Economic development is accompanied by structural change. The trade theoretic literature offers two major hypotheses – i. e., the factor-endowment and the total-factor-productivity-- for explaining the stylized facts of structural change. This note revisits these hypotheses. In particular, it explores, with the help of a simple geometric apparatus, the analytical implications of the two hypotheses and draws out their striking similarities. It argues that although the literature has treated these two hypotheses as distinctly different, they are indeed analytically equivalent in the sense that they are both based on a similar type of shifts in the production functions. An important implication of this analytical equivalence is that, compounded with the data problems, it makes the task of empirical testing and discriminating between the two alternative hypotheses virtually impossible.

Suggested Citation

  • Quibria, M.G & Srinivasan, T.N., 2010. "Technological Progress, Factor Endowments and Structural Change:A Note," MPRA Paper 25613, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25613
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    1. 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.
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    Cited by:

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    More about this item

    Keywords

    nontraded good; technological progress; total-factor-productivity; factor endowment; and economic growth;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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