Sectoral composition and macroeconomic dynamics
Alonso Carrera, Jaime (Universidad de Vigo)
Caballé, Jordi (Universitat Autònoma de Barcelona)
Raurich, Xavier (Universitat de Barcelona)

Imprint:	Barcelona: Graduate School of economics, 2011
Description:	37 pàg.
Abstract:	We analyze the transitional dynamics of a model with heterogeneous consumption goods. In this model, convergence is driven by two different forces: the typical diminishing returns to capital and the sectoral change inducing the variation in relative prices. We show that this second force a¤ects the growth rate if the two consumption goods are not Edgeworth independent and if these two goods are produced with technologies exhibiting different capital intensities. Because the aforementioned dynamic sectoral change arises only under heterogeneous consumption goods, the transitional dynamics of this model exhibits striking differences with the growth model with a single consumption good. We also show that these differences in the transitional dynamics can give raise to large discrepancies in the welfare cost of shocks between the economy with a unique consumption good and the economy with multiple consumption goods.
Grants:	Ministerio de Ciencia e Innovación ECO2009-09847 Ministerio de Ciencia e Innovación ECO2009-06953 Ministerio de Ciencia e Innovación ECO2008-02752 Ministerio de Educación PR2009-0162 Ministerio de Educación SM2009-0001 Generalitat de Catalunya 2009 / SGR-00350 Generalitat de Catalunya 2009 / SGR-1051
Rights:	Tots els drets reservats.
Language:	Anglès
Series:	GSE working paper; 545
Document:	Working paper ; recerca ; Article ; Versió publicada
Subject:	Multi-sector growth models ; Transitional dynamics ; Consumption growth
Published in:	Barcelona GSE graduate school of economics Working Papers, 2011

Adreça alternativa: https://bse.eu/research/working-papers/sectoral-composition-and-macroeconomic-dynamics

37 p, 1.2 MB

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