A Qualitative Approach to Structural Change Modeling

This paper is devoted to the study of structural dynamics. The focus is on labor-allocation-dynamics in a tree-sector-economy. However, our approach can be applied to other types of structural change (e.g. income-distribution-dynamics). In contrast to the previous literature our assumptions are very general and the analysis is predominantly qualitative (“topological”). We assume a differential-equation-system depicting structural dynamics on a simplex. The standard assumptions regarding the mathematical properties of this system and the empirically observable stylized facts provide information about the geometrical properties of trajectories of structural change. We use this information to make structural-change-predictions and show path-dependency in structural change