Structural Change and Business Cycles:An Evolutionary Approach

The aim of this paper is to account for both the short-run uctuations and thevery-long run transformations induced by technological change in analysing long-rungrowth patterns. The paper investigates the possible imprint left by short-run uctuationson the long run dynamics by aecting the mechanisms underlying structuralchange. To full this aim, we revert to a growth model with evolutionary microfoundedstructural change. The model endogenies both technical change and changesin patterns of nal and intermediate demand as aecting macro-economic growth,through the structural change of the economy. This work is in line with the attemptsto embracing in a unifying framework both neo-Schumpeterian and Keynesian line ofthoughts in explaining economic growth. This model directly extends the one presentedin Lorentz and Savona (2008). The paper reverts to numerical simulationsto investigate both the imprint of various business cycles scenarios on the structuralchange patterns and the eect of various structural change scenarios on the amplitudeof business cycles. We carry out the numerical simulation on the basis of theactual I-O coefficients for Germany. These numerical simulations show us that onethe one hand, the factor at the source of business cycles drastically aect the patternsof structural change. On the other hand, the mechanisms at the core of structuralchange, generates business cycles as a by-product.