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The Structuralist Growth Model

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  • Bill Gibson

    (University of Vermont, Burlington, VT 05045; University of Massachusetts Amherst)

Abstract

This paper examines the underlying theory of structuralist growth models in an effort to compare that framework with the standard approach of Solow and others. Both the standard and structuralist models are solved in a common mathematical framework that emphasizes their similarities. It is seen that while the standard model requires the growth rate of the labor force to be taken as exogenously determined, the structuralist growth model must take investment growth to be determined exogenously in the long run. It is further seen that in order for the structuralist model to reliably converge to steady growth, considerable attention must be given to how agents make investment decisions. In many ways the standard model relies less on agency than does the structuralist. While the former requires a small number of plausible assumptions for steady growth to emerge, the structuralist model faces formidable challenges, especially if investment growth is thought to be determined by the rate of capacity utilization.

Suggested Citation

  • Bill Gibson, 2009. "The Structuralist Growth Model," UMASS Amherst Economics Working Papers 2009-01, University of Massachusetts Amherst, Department of Economics.
    • Handle: RePEc:ums:papers:2009-01
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    References listed on IDEAS

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    1. Marc Lavoie, 1992. "Foundations of Post-Keynesian Economic Analysis," Books, Edward Elgar Publishing, number 275.
    2. Skott,Peter, 2008. "Conflict and Effective Demand in Economic Growth," Cambridge Books, Cambridge University Press, number 9780521066310, September.
    3. Gibson, Bill, 2005. "The transition to a globalized economy: Poverty, human capital and the informal sector in a structuralist CGE model," Journal of Development Economics, Elsevier, vol. 78(1), pages 60-94, October.
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    5. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 267-279.
    6. Bill Gibson & Dirk Ernst Van Seventer, 2000. "A Tale of Two Models: Comparing structuralist and neoclassical computable general equilibrium models for South Africa," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(2), pages 149-171.
    7. zamparelli, luca, 2008. "Direction and intensity of technical change: a micro-founded growth model," MPRA Paper 10843, University Library of Munich, Germany.
    8. Durlauf, Steven N, 1996. "A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
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    10. Setterfield, Mark, 2001. "Cumulative Causation, Interrelatedness and the Theory of Economic Growth: A Reply to Argyrous and Toner," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(1), pages 107-112, January.
    11. Amitava Krishna Dutt (ed.), 2003. "Development Economics and Structuralist Macroeconomics," Books, Edward Elgar Publishing, number 2658.
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    13. Bill Gibson, 2007. "A Multi-Agent Systems Approach to Microeconomic Foundations of Macro," UMASS Amherst Economics Working Papers 2007-10, University of Massachusetts Amherst, Department of Economics.
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    Cited by:

    1. Freire, Clovis, 2019. "Economic diversification: A model of structural economic dynamics and endogenous technological change," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 13-28.

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