Abstract

RAFFO, Leonardo. CAN STRUCTURAL CHANGE ACCOMPANY EXOGENOUS GROWTH?. Cuad. Econ. [online]. 2005, vol.24, n.42, pp.49-87. ISSN 0121-4772.

This article proposes an exogenous growth model for three sectors based on a simple general equilibrium structure replicating the patterns of structural change which have affected many countries. The model shows that structural change can be explained by per capita capital being accumulating by supposing consumers’ non-homotetic preferences in the case of relatively closed economies having no dynamic sectors and where a good part of the population cannot accrue savings due to their low income levels. In these particular conditions, accumulating per capita capital represents a sufficient condition for structural change, because it acts as an activating mechanism as described in Engel’s law.

Keywords : structural change; Engel’s law; activating mechanism; exogenous growth.

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