Endowment structures, industrial dynamics, and economic growth

Jiandong Ju, Justin Lin () and Yong Wang

Journal of Monetary Economics, 2015, vol. 76, issue C, 244-263

Abstract: Motivated by four stylized facts about industry dynamics, we propose a theory of endowment-driven structural change by developing a tractable growth model with infinite industries. The aggregate economy in the model still follows the Kaldor facts, but the composition of the underlying industries changes endogenously over time. Each industry exhibits a hump-shaped life cycle: as capital reaches a certain threshold level, a new industry appears, prospers, and then declines, to be gradually replaced by a more capital-intensive industry, ad infinitum. Analytical solutions are obtained to characterize the life cycle of each industry and the perpetual structural change.

Keywords: Structural change; Industrial dynamics; Economic growth; Capital accumulation (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (43)

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Related works:
Working Paper: Endowment Structure, Industrial Dynamics, and Economic Growth (2010)
Working Paper: Endowment structures, industrial dynamics, and economic growth (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:76:y:2015:i:c:p:244-263

DOI: 10.1016/j.jmoneco.2015.09.006

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