Structural Economic Dynamics: Looking Back and Forging Ahead

The literature of structural economic dynamics emerged from the attempt to extend Keynes-type macroeconomics to the analysis of the long run. After Roy Harrod's exploration of capital accumulation requirements in a macro economy subject to technical progress and population growth, economists broadly associated with the Cambridge tradition attempted the identification of consistency conditions for a disaggregate, multi-sectoral economy undergoing changes in relative proportions. Moving from the criticism of the aggregate methodology and from the implementation of inter-industry analysis in empirical research, a first set of theoretical principles for the explanation of long-run structural changes were developed.The paper discusses the analytical core and developments of the structural dynamics tradition starting from the discussion of the relationship between technical progress and Engel's law, and of the interdependence between growth, resource utilization and capital accumulation. It is argued that the original research porgramme gave way to two main lines of inquiry. One centered on the analysis of the relationship between economic theory and economic history; the other centered on the investigation of alternative analytical representations of the economic system.