2006/28 | LEM Working Paper Series | |
Evolutionary Micro-dynamics and Changes in the Economic Structure |
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André Lorentz, Maria Savona |
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Keywords | ||
Economic Growth, Structural change, Growth of Services,
Evolutionary Micro–foundation, Input–Output
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JEL Classifications | ||
E11, L16, O14, O33, O41
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Abstract | ||
The paper develops a growth model with evolutionary micro–founded
structural change. The model endogenises both technical change and
changes in final and intermediate demand as affecting macro-economic
growth, through the structural change of the economy. The aim is to
formally account for the empirical stylised fact of the changes in the
sectoral structure of the economy which have led to the growth of ser-vices
in most advanced countries over the last decades. At the meso-macro
level of analysis, we investigate whether the structural changes
leading to the growth of services are mainly demand-led, both in terms
of final consumption and intermediate demand. At the micro-level of
analysis, we explore whether demand constraints affect the degree of
exploitation of technological opportunities. The simulated results are
based on the use of the actual Input–Output coefficients in the case
of Germany. Four scenarios have been identified, which account for
the effects of a set of key parameters on the changes in the structure
of the economy.
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