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Decomposing Structural Change

  • Jaime Alonso-Carrera ORCID logo EMAIL logo , María Jesús Freire-Serén ORCID logo und Xavier Raurich ORCID logo
Veröffentlicht/Copyright: 7. Juni 2024
The B.E. Journal of Macroeconomics
Aus der Zeitschrift The B.E. Journal of Macroeconomics Band 24 Heft 2

Abstract

We identify the mechanisms governing the propagation of technological shocks to the sectoral allocation of labor in a non-parameterized growth model. These propagation mechanisms are: (i) the change in aggregate income; whose effect on sectoral composition depends on the income elasticities of consumption demand; (ii) the change in the relative prices of consumption goods, which alters the sectoral composition depending on the Allen-Uzawa elasticities of substitution between goods; (iii) the change in the rental rates, whose effect on sectoral composition is determined by the sectoral elasticities of substitution between capital and labor; and, (iv) the direct effect of the sector and factor bias of the technological change. From this analysis, we derive an accounting method to measure the contribution of these propagation mechanisms to structural change in parameterized growth models. By using some well-known parameterizations, we account for the contribution of each mechanism to the U.S. structural change in the period 1948–2010.

Keywords: structural change; non-homothetic preferences; sectoral productivity
JEL Classification: O11; O41; O47
Corresponding author: Jaime Alonso-Carrera, Departamento de Fundamentos del Análisis Económico, Universidade de Vigo, Facultad de Ciencias Económicas y Empresariales, Campus As Lagoas-Marcosende, 36310 Vigo, Spain, E-mail:

Funding source: Ministerio de Ciencia, Tecnología e Innovación

Award Identifier / Grant number: PID2021-124015NB-I00

Award Identifier / Grant number: PID2021-126549NB-I00

Acknowledgments

Financial support from the Government of Spain and FEDER through grants PID2021-126549NB-I00 and PID2021-124015NB-I00 is gratefully acknowledged. This paper has benefited from comments by the participants in the Workshop on Structural Change and Economic Growth at University of Barcelona, III Navarre-Basque Country Macroeconomic Workshop, Annual Meeting of the Association for Public Economic Theory, DEGIT XXII, XI Workshop on Public Policy Design at University of Girona, SAEe 2018 and seminar at ESADE, Universitat Autònoma de Barcelona, Universidad de Santiago de Compostela, Universitat de les Illes Balears and Católica Lisbon Economic and Business.

  1. Research funding: This work was financially supported by the Ministerio de Ciencia, Tecnología e Innovación (PID2021-124015NB-I00, PID2021-126549NB-I00).

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Supplementary Material

This article contains supplementary material (https://doi.org/10.1515/bejm-2023-0124).

Received: 2023-07-17
Accepted: 2024-05-14
Published Online: 2024-06-07

© 2024 Walter de Gruyter GmbH, Berlin/Boston

Artikel in diesem Heft

  1. Frontmatter
  2. Advances
  3. Corporate Tax Rates, Allocative Efficiency, and Aggregate Productivity
  4. Contributions
  5. Endogenous Financial Friction and Growth
  6. Decomposing Structural Change
  7. Industry Impacts of US Unconventional Monetary Policy
  8. Monetary Policy Transmission in Canada – A High Frequency Identification Approach
  9. Child Labor, Corruption, and Development
  10. Inflation Uncertainty from Firms’ Perspective, Overconfidence and Credibility of Monetary Policy
  11. Does Nominal Wage Stickiness Affect Fiscal Multiplier in a Two-Agent New Keynesian Model?
  12. To Create or to Redistribute? That is the Question
  13. Estimating Expected Asset Returns with the Present Value Model of Consumption and Fed Forecasts
https://doi.org/10.1515/bejm-2023-0124
Schlagwörter für diesen Artikel
structural change; non-homothetic preferences; sectoral productivity

Artikel in diesem Heft

  1. Frontmatter
  2. Advances
  3. Corporate Tax Rates, Allocative Efficiency, and Aggregate Productivity
  4. Contributions
  5. Endogenous Financial Friction and Growth
  6. Decomposing Structural Change
  7. Industry Impacts of US Unconventional Monetary Policy
  8. Monetary Policy Transmission in Canada – A High Frequency Identification Approach
  9. Child Labor, Corruption, and Development
  10. Inflation Uncertainty from Firms’ Perspective, Overconfidence and Credibility of Monetary Policy
  11. Does Nominal Wage Stickiness Affect Fiscal Multiplier in a Two-Agent New Keynesian Model?
  12. To Create or to Redistribute? That is the Question
  13. Estimating Expected Asset Returns with the Present Value Model of Consumption and Fed Forecasts
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