Structural change and cumulative causation: A Kaldorian approach


Type
Article
Change log
Authors
McCombie, JSL 
Abstract

jats:titleAbstract</jats:title>jats:pThis paper presents a multisectoral model based on Kaldor's approach to explain the importance of structural change and cumulative causation. Divergence in countries' growth rates in Kaldorian models are explained jats:italiceither</jats:italic> by different degrees of increasing returns among sectors on the supply side jats:italicor</jats:italic> by different income elasticities of exports and imports on the demand‐side, but it is not explained by jats:italicboth</jats:italic> factors together. In this vein, a multisector growth model that combines different sectoral income elasticities and different sectoral increasing returns is built to explain how structural changes toward high‐tech industries can trigger a process of cumulative causation and ensure higher growth rates in the long run.</jats:p>

Description
Keywords
balance-of-payments constrained growth models, cumulative causation, export-led growth, multisector growth models, structural change, Verdoorn's law
Journal Title
Metroeconomica
Conference Name
Journal ISSN
0026-1386
1467-999X
Volume Title
71
Publisher
Wiley
Rights
All rights reserved
Sponsorship
Coordination for the Improvement of Higher Education Personnel (CAPES) Brazil and Cambridge Overseas Trust (Magacho)