We consider a two-sector economy, where public infrastructure unevenly affects the productivity of the sectors. Private and public capital are produced with different technologies, and the sector producing the infrastructure is not benefiting from its services. The government provides both...

This paper presents a tractable endogenous two-sector growth model with non-Gorman intra-temporal preferences and directed technical change. One of the two consumption goods is a necessity, whereas the other is a luxury. If the economy starts with a low initial knowledge stock, households are...

In the course of growth, sectoral data features (i) changing relative expenditures of different sectors, (ii) non-constancy in the growth rates of relative prices and (iii) shifting relative TFP growth rates of sectors. This paper presents a simple model of directed technical change, which is...

This paper develops a two-sector R&D-based growth model with congestion effects from increasing urban population density. We show that endogenous technological progress causes structural change if there are positive productivity spillovers from the modern to the traditional sector and Engel’s...

The Kuznets-Kaldor stylized facts are one of the most striking empirical observations about the development process in the industrialized countries: While massive factor reallocation across technologically distinct sectors takes place, the aggregate ratios of the economy are quite stable. This...

This paper analyzes the relationship between financial repression and structural change. We present a simple theoretical model of structural transformation in which the impact of financial repression on unbalanced growth is studied. The model suggests that governments may choose to repress the...

In recent decades, foreign direct investment (FDI) played an important role in achieving economic growth and development especially for developing countries. FDI bring capital and introduced new technology. Moreover, the new technology can also spill over to the local firms in the host country....

This paper presents an endogenous growth model where, in line with the recent empirical evidence, the telecommunications industry (telecom) is an engine of growth. In such a framework, this paper analyzes the channels through which telecom contributes to economic growth and focuses on market...

This paper offers an alternative way, based on the logistic population growth hypothesis, to yield transitional dynamics in the standard AK model with exogenous savings rate. Within this framework, we show that the dynamics of the capital stock per person and its growth rate can be non-monotonic...

Growth accounting exercises point to aggregate TFP differences as the dominant source of the large cross-country income differences. In this paper, I ask which sectors account for the aggregate TFP gap between rich and poor countries. Data limitations for developing countries have led...