Before revision: The structures, including technologies, industries, infrastructure and institutions, in a country have three attributes , namely, structurality, durationality, and transformality . The paper proposes a novel method to model the structural transformation in a market economy. With the common knowledge assumption, the paper proposes a generic model combining optimal control and optimal switching to study the static equilibrium and dynamic equilibrium of resource allocations under a given industrial structureand the equilibrium when the condition for transforming industrial structures arises by a social planner to maximize the representative household's utility in a market economy .
After revision: The structures, including technologies, industries, infrastructure and institutions, in a country have three attributes , namely, structurality, durationality, and transformality , and discuss their implications for methods of economic modeling. Then, with the common knowledge assumption, the paper proposes a generic model combining optimal control and optimal switching to study the static equilibrium and dynamic equilibrium of resource allocations under a given industrial structureand the equilibrium when the condition for transforming industrial structures arises by a social planner to maximize the representative household's utility in a market economy .