Beyond Balanced Growth |
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| Authors: | Piyabha Kongsamut,Sergio Rebelo,& Danyang Xie |
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| Affiliation: | International Monetary Fund,;Northwestern University, NBER, and CEPR,;Hongkong University of Science and Technology |
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| Abstract: | Balanced growth models are commonly used in macroeconomics because they are consistent with the well-known Kaldor facts regarding economic growth. These models, however, are inconsistent with one of the most striking regularities of the growth process-the massive reallocation of labour from agriculture into manufacturing and services. This paper presents a simple model consistent with both the Kaldor facts and the dynamics of sectoral labour reallocation. |
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