In this paper we investigate the process of creation and destruction of industries as it stems from productivity increasing innovations and from the induced changes of consumption patterns. In our model industries whose demand increases experience an expansion of the number of intermediate goods and hence of their research effort, while those whose demand declines undergo a cost-cutting restructuring with a corresponding reduction of the number of intermediates. We show that if aggregate consumption is concentrated on high (low) priority goods in the early (later) stages of the economy's development and spread out more evenly in an intermediate stage, then the diversification of the economy over the development path is inversely U-shaped: a result that is consistent with the empirical evidence in Imbs and Wacziarg 2003 "Stages of Diversification." American Economic Review 93: 63-86.

Andergassen, R., Nardini, F., Ricottilli, M. (2018). Innovation, specialization and growth in a model of structural change. THE B.E. JOURNAL OF MACROECONOMICS, 18(2), 1-15 [10.1515/bejm-2017-0095].

Innovation, specialization and growth in a model of structural change

Andergassen, Rainer;Nardini, Franco
;
Ricottilli, Massimo
2018

Abstract

In this paper we investigate the process of creation and destruction of industries as it stems from productivity increasing innovations and from the induced changes of consumption patterns. In our model industries whose demand increases experience an expansion of the number of intermediate goods and hence of their research effort, while those whose demand declines undergo a cost-cutting restructuring with a corresponding reduction of the number of intermediates. We show that if aggregate consumption is concentrated on high (low) priority goods in the early (later) stages of the economy's development and spread out more evenly in an intermediate stage, then the diversification of the economy over the development path is inversely U-shaped: a result that is consistent with the empirical evidence in Imbs and Wacziarg 2003 "Stages of Diversification." American Economic Review 93: 63-86.
2018
Andergassen, R., Nardini, F., Ricottilli, M. (2018). Innovation, specialization and growth in a model of structural change. THE B.E. JOURNAL OF MACROECONOMICS, 18(2), 1-15 [10.1515/bejm-2017-0095].
Andergassen, Rainer; Nardini, Franco*; Ricottilli, Massimo
File in questo prodotto:
File Dimensione Formato  
[The B.E. Journal of Macroeconomics] Innovation specialization and growth in a model of structural change.pdf

Open Access dal 22/03/2019

Tipo: Versione (PDF) editoriale
Licenza: Licenza per accesso libero gratuito
Dimensione 232 kB
Formato Adobe PDF
232 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/640481
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 4
  • ???jsp.display-item.citation.isi??? 2
social impact