Conformism and Structural Change

26 Pages Posted: 28 Dec 2011

See all articles by Takeo Hori

Takeo Hori

Aoyama Gakuin University

Masako Ikefuji

Osaka University - Osaka School of International Public Policy (OSIPP)

Kazuo Mino

Kyoto University - Institute of Economic Research

Date Written: December 27, 2011

Abstract

We study structural change in a simple, two-sector endogenous growth model and show that the presence of commodity-specific consumption externalities can be a source of structural change. When the degrees of consumption externalities are different between different goods, the two sectors grow at different rates, whereas the aggregate economy exhibits balanced growth in the sense that capital stock and expenditure grow at the same constant rate. Under the more restrictive condition such that the degrees of consumption externalities are the same, structural change does not occur. We also show that the dependence of the benchmark consumption levels on the past consumption is crucial for the divergent patterns of structural change across countries.

Keywords: Structural change, Consumption, externalities, Two-sector growth model, Kaldor facts

JEL Classification: E21, E30, O10, O41

Suggested Citation

Hori, Takeo and Ikefuji, Masako and Mino, Kazuo, Conformism and Structural Change (December 27, 2011). ISER Discussion Paper No. 827, Available at SSRN: https://ssrn.com/abstract=1977301 or http://dx.doi.org/10.2139/ssrn.1977301

Takeo Hori (Contact Author)

Aoyama Gakuin University ( email )

4-4-25 Shibuya, Shibuya-ku
Tokyo, 150-8366
Japan

Masako Ikefuji

Osaka University - Osaka School of International Public Policy (OSIPP) ( email )

1-31, Machikaneyama
Toyonaka, Osaka 560-0043
Japan

Kazuo Mino

Kyoto University - Institute of Economic Research ( email )

Yoshida-Honmachi
Sakyo-ku
Kyoto 606-8501
JAPAN

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