Structural Change and the Kaldor Facts in a Growth Model with Relative Price Effects and Non-Gorman Preferences

Boppart, Timo

doi:10.2139/ssrn.1782676

Cited by 42 publications

(73 citation statements)

References 35 publications

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“…To address this, the literature mainly considers technological factors that increase the return to capital over time and, in turn, the saving rate. However, by associating the increased saving rate with increasing returns to capital this explanation contradicts recent evidence provided by Boppart (2014) and Ledesma and Moro (2016), suggesting that the return to capital is decreasing over time. 6 On the preference side, Strulik (2012) shows that as wealth increases, the pure rate of time preference decreases.…”

Section: Dynamics Of the Saving Rate And The Real Return To Capitalcontrasting

confidence: 64%

Dynamic Status Effects, Savings, and Income Inequality

2017

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This paper advances the hypothesis that the intensity of status preferences depends negatively on the average wealth of society (endogenous dynamic status effect), in accordance with empirical evidence. Our theory replicates the contradictory historical facts of an increasing saving rate along with declining returns to capital over time. By affecting the dynamics of the saving rate, the dynamic status effect raises inequality, thereby providing a behavioural mechanism for the observed diverse dynamics of income inequality across countries. In countries in which the dynamic status effect is strong (weak) inequality rises (declines) over time in response to a positive productivity shock.JEL classification: D11, D31, O11.

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Section: Dynamics Of the Saving Rate And The Real Return To Capitalcontrasting

confidence: 64%

Dynamic Status Effects, Savings, and Income Inequality

2017

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“…Interestingly, this pattern of convergence has been observed in some fast growing economies that where initially poor (South Korea, Taiwan, Japan). 3 This paper then outlines the relevance of the initial intensity of the minimum consumption requirements in explaining the observed transitional dynamics. This variable is inversely related to the level of development.…”

Section: [Insert Figures 1 and 2]mentioning

confidence: 98%

Demand-based structural change and balanced economic growth

Alonso-Carrera

Raurich

2015

Journal of Macroeconomics

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Abstract:We analyze the equilibrium of a multi-sector exogenous growth model where the introduction of minimum consumption requirements drives structural change. We show that equilibrium dynamics simultaneously exhibt structural change and balanced growth of aggregate variables as is observed in US when the initial intensity of minimum consumption requirements is sufficiently small. This intensity is measured by the ratio between the aggregate value of the minimum consumption requirements and GDP and, therefore, it is inversely related with the level of economic development. Initially rich economies benefit from an initially low intensity of the minimum consumption requirements and, as a consequence, these economies end up exhibiting balanced growth of aggregate variables, while there is structural change. In contrast, initially poor economies suffer from an initially large intensity of the minimum consumption requirements, which makes the growth of the aggregate variables unbalanced during a very large period. These economies may never exhibit simultaneously balanced growth of aggregate variables and structural change.JEL Codes: O41, O47

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“…Boppart (2014) provides the first model that incorporates both income and substitution effects to generate structural transformation along a balanced growth path. Herrendorf, Rogerson and Valentinyi (2013) demonstrate that when structural change is defined over final expenditures instead of value added, as it is in our paper, then income effects play a nontrivial role relative to substitution effects.…”

Section: Decomposing Income Versus Substitution Effectsmentioning

confidence: 99%

Structural Change and Global Trade

Lewis¹,

Monarch²,

Sposi³

et al. 2018

gwp

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Since 1970, services has risen from 50 percent of the world's final consumption expenditures to nearly 80 percent. Services are also far less traded between countries than goods. Thus, as consumers become more service-oriented, the world will become "less open", affecting international trade volumes. Using a general equilibrium trade model with non-homothetic preferences and endogenous shifts in consumption behavior, we quantify the impact of such structural change on global trade across 27 countries. We find that world trade as a fraction of GDP would have been about 23 percentage points or 70 percent higher by 2015 if countrylevel expenditure patterns were unchanged from 1970 onwards. Income effects explain about one-quarter of this counterfactual. Without input-output linkages in production, the counterfactual increase in world trade with no structural change would be even greater. Finally, the process of structural transformation toward services systematically impedes the gains from trade. JEL codes: F41, L16, O41

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Structural Change and the Kaldor Facts in a Growth Model with Relative Price Effects and Non-Gorman Preferences

Cited by 42 publications

References 35 publications

Dynamic Status Effects, Savings, and Income Inequality

Dynamic Status Effects, Savings, and Income Inequality

Demand-based structural change and balanced economic growth

Structural Change and Global Trade

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