American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Sectoral Technology and Structural Transformation
American Economic Journal: Macroeconomics
(pp. 104–33)
Abstract
We assess how the properties of technology affect structural transformation, i.e., the reallocation of production factors across the broad sectors of agriculture, manufacturing, and services. To this end, we estimate sectoral constant elasticity of substitution (CES) and Cobb-Douglas production functions on postwar US data. We find that differences in technical progress across the three sectors are the dominant force behind structural transformation whereas other differences across sectoral technology are of second order importance. Our findings imply that Cobb-Douglas sectoral production functions that differ only in technical progress capture the main technological forces behind the postwar US structural transformation. (JEL E16, E25, O33, O47)Citation
Herrendorf, Berthold, Christopher Herrington, and Ákos Valentinyi. 2015. "Sectoral Technology and Structural Transformation." American Economic Journal: Macroeconomics 7 (4): 104–33. DOI: 10.1257/mac.20130041Additional Materials
JEL Classification
- E16 General Aggregative Models: Social Accounting Matrix
- E25 Aggregate Factor Income Distribution
- O33 Technological Change: Choices and Consequences; Diffusion Processes
- O47 Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence