Structural change, Engel's Consumption Cycles and Kaldor's Facts of Economic Growth
Journal
Journal of Monetary Economics
ISSN
0304-3932
ISSN-Digital
1873-1295
Type
journal article
Date Issued
2008-10-01
Author(s)
Abstract
Non-linear Engel-curves for consumer goods cause continuous structural change. Goods are sequentially introduced starting out as a luxury with high income elasticity and ending up as a necessity with low income elasticity. Although this leads to rising and falling sectoral employment shares, the model exhibits a steady growth path along which the Kaldor facts are satisfied. Extending the basic model to the case of endogenous product innovations shows that complementarities between aggregate and sectoral growth may give rise to multiple equilibria.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Elsevier
Publisher place
Amsterdam
Volume
55
Number
7
Start page
1317
End page
1328
Pages
12
Subject(s)
Eprints ID
184830