Capital-Labor Substitution, Structural Change and Growth

Alvarez-Cuadrado, Francisco; Long, Ngo Van

doi:10.2139/ssrn.1954652

Cited by 30 publications

(33 citation statements)

References 61 publications

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“…By contrast to the models developed by Ngai and Pissarides () and Acemoglu and Guerrieri (), the model of Alvarez‐Cuadrado et al . () even makes it possible for the fractions of capital and labour used in any sector to move in the opposite direction. As pointed out by the authors, the results that they obtain may be particularly useful for the analysis of structural change in terms of other factors of production for which substitutability is different across sectors, for example the substitutability between skilled and unskilled labour (see e.g.…”

Section: The Drivers Of Structural Changementioning

confidence: 99%

The Drivers of Structural Change

Neuss

2018

Journal of Economic Surveys

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The main goal of this paper is to provide an integrated survey of the literature devoted to identifying the drivers of structural change, broadly defined as the process of reallocation of economic activity across the three broad sectors agriculture, manufacturing and services. Using the GGDC 10‐Sector Database, this paper first presents the empirical facts associated with structural change in different regions of the world – that is Europe and the USA, Asia, Latin America, and Africa – then reviews four determinants of structural change: (i) changes in income, (ii) changes in relative (sectoral) prices, (iii) changes in input–output linkages and (iv) changes in comparative advantage(s) via globalization and trade.

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Section: The Drivers Of Structural Changementioning

confidence: 99%

The Drivers of Structural Change

Neuss

2018

Journal of Economic Surveys

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“…Next we consider the existing evidence regarding the potential role of differences in sectoral capital shares, as emphasized by Acemoglu and Guerrieri (2008), and of differences in sectoral elasticity of substitution, as emphasized by Alvarez-Cuadrado et al (2012). Herrendorf et al (2012a) speak to these questions by assessing how structural transformation is affected by sectoral differences in labor-augmenting technological progress, substitutability between capital and labor, and capital intensity.…”

Section: Sectoral Differences In Capital Shares and Elasticities Of Smentioning

confidence: 99%

Growth and Structural Transformation

Herrendorf

Rogerson

Valentinyi

2013

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Structural transformation refers to the reallocation of economic activity across the broad sectors agriculture, manufacturing and services. This review article synthesizes and evaluates recent advances in the research on structural transformation. We begin by presenting the stylized facts of structural transformation across time and space. We then develop a multi-sector extension of the one-sector growth model that encompasses the main existing theories of structural transformation. We argue that this multi-sector model serves as a natural benchmark to study structural transformation and that it is able to account for many salient features of structural transformation. We also argue that this multi-sector model delivers new and sharper insights for understanding economic development, regional income convergence, aggregate productivity trends, hours worked, business cycles, and wage inequality. We conclude by suggesting several directions for future research on structural transformation.

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“…Moreover, as even technological progress takes place, the relative price of sector one's output will fall, its expenditure share will rise, and more labor will be allocated to it. Alvarez-Cuadrado et al (2012) emphasized this economic force behind structural transformation.…”

Section: Introductionmentioning

confidence: 99%

Sectoral Technology and Structural Transformation

Herrendorf

Herrington

Valentinyi

2015

American Economic Journal: Macroeconomics

129

139

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper assesses the importance for structural transformation of three features of sectoral technology: labor-augmenting technological progress, capital intensity, and substitutability between capital and labor. We estimate CES production functions for agriculture, manufacturing, and services on postwar US data and compare them with Cobb-Douglas production functions with different and with equal capital shares. We find that sectoral differences in labor-augmenting technological progress are the main force behind the trends in observed relative prices and sectoral labor. As a result, sectoral Cobb-Douglas production functions with equal capital shares (which by construction abstract from differences in the elasticity of substitution and in capital shares) do a good job of capturing the postwar US structural transformation. Terms of use: Documents in

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Capital-Labor Substitution, Structural Change and Growth

Cited by 30 publications

References 61 publications

The Drivers of Structural Change

The Drivers of Structural Change

Growth and Structural Transformation

Sectoral Technology and Structural Transformation

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