structural change in an open economy we study the importance of international trade in structural change our framework has both productivity and trade cost shocks and allows for non unitary income and substitution elasticities we calibrate our model to investigate south korea s structural change between 1971 and 2005 we nd that the shock processes propagated through the model s two main transmission mechanisms non homothetic preferences and the open economy explain virtually all of the evolution of agriculture and services labor shares and the rising part of the hump shape in manufacturing counterfactual exercises show that the role of the open economy is quantitatively important for explaining south korea s structural change

the drivers of structural change the main goal of this paper is to provide an integrated survey of the literature devoted to identifying the drivers of structural change broadly defined as the process of reallocation of economic activity across the three broad sectors agriculture manufacturing and services using the ggdc 10 sector database this paper first presents the empirical facts associated with structural change in different regions of the world that is europe and the usa asia latin america and africa then reviews four determinants of structural change i changes in income ii changes in relative sectoral prices iii changes in input output linkages and iv changes in comparative advantage s via globalization and trade

the informal sector and tax on employment a dynamic general equilibrium investigation abstract this paper elaborates on the evolution of the informal sector vis a vis the evolution of agricultural and formal sectors in a developing country economy in process of growth the analytical contribution of this essay extends the ramsey theory of growth into a framework that includes an informal sector and household preferences that display engel effects in agricultural and in informally produced goods besides showing that the informal sector s importance diminishes over time as the country s economy grows the results from the model demonstrate that a country can successfully reduce its informal employment by reducing tax on employment in the formal sector

property rights and consumption volatility evidence from a land reform in vietnam summary during vietnam s transition from a socialist to a market economy household s property rights over agricultural land were considerably strengthened through a land certification program this resulted in active formal credit and land markets either of which potentially affects consumption levels and volatility this article evaluates the program impact with respect to consumption outcomes in particular it identifies the channel of impact through which improved property rights affect consumption volatility we find that land certification increases consumption levels for rural households but also consumption volatility for a subgroup of households identified by an instrument we show that the certification program affects consumption outcomes of this subgroup through presumably more risky credit based agricultural investment at the intensive margin

agricultural distortions structural change and economic growth a cross country analysis taxing agriculture to mobilize resources for industrialization has been a widely used development strategy using novel cross country time series data sets with direct measures of agricultural taxation we examine how a policy bias against agriculture affects the speed of convergence in income per capita structural change and economic growth we find that distortionary agricultural policies in poor economies can account for the emergence of convergence clubs in our sample by significantly retarding their structural transformation and economic growth overall we find no evidence suggesting that policies that discriminate against agriculture have been beneficial for long term economic growth

hierarchical package bidding a paper pencil combinatorial auction we introduce a new combinatorial auction format based on a simple trans parent pricing mechanism tailored for the hierarchical package structure proposed by rothkopf pekec and harstad 1998 to avoid computational complexity this combination provides the feedback necessary for bidders in multi round auctions to discern winning bidding strategies for subsequent rounds and to coordinate re sponses to aggressive package bids the resulting mechanism is compared to two leading alternatives in a series of laboratory experiments involving varying degrees of value synergies based on these wind tunnel tests the fcc has decided to use hierarchical package bidding in the major upcoming 700mhz auction

transportation costs agricultural productivity and cross country income differences i document large difierences in domestic transport costs and transportation infrastructure across nations the richest countries have 5 times lower transport costs and 32 times more infrastructure per capita than the poorest countries of the world are these difierences a source of aggregate labor productivity difierences across nations using a three sector two region general equilibrium model i show that high transport costs can distort the allocation of resources not only across geographically dispersed production units within sectors but also between agriculture and non agriculture taking as given the observed difierences in transportation costs and transportation infrastructure per capita i quantify the role of transportation for cross country income difierences the calibrated model produces an income disparity of 7 5 between the 5 rich and 5 poor countries this corresponds to an improvement of 50 relative to the disparity predicted by a two sector model of agriculture and non agriculture furthermore the efiects of advancements in transportation are non linear the elasticity of aggregate labor productivity with respect to transport labor productivity in the poorest nations is 6 times higher than in the richest ones the efiects of transport frictions are even more pronounced when restrictions to regional migration are introduced

land ownership security and farm investment comment economists have long argued that increasing security of individual property rights in land leads to increased investment feder and onchan ft are among the first to empirically test this argument in a rigorous way based on data from thailand ft infer that ownership of land title increases capital accumulation and investment their analysis broadens our understanding of the linkages between capital markets and land investment and offers hypotheses for further research this comment raises two issues concerning the ft article first the empirical results are open to several interpretations because of fundamental questions about causality and the definition of ownership security a reinterpretation of the data suggests that the aggregate impact of title on investment may have been small second inference from the thailand study must be made with caution consideration of a more general model suggests other conditions which influence the impact of title on investment and productivity our comments do not diminish the importance of the ft study but raise conceptual issues that may prove useful for future land titling research

the food problem and the evolution of international income levels in most poor countries large fractions of land labor and other productive resources are devoted to producing food for subsistence needs we show that a model incorporating the food problem can provide new and useful insights into the evolution of international income levels in particular we find that the food problem can explain why some countries started to realize increases in per capita output more than 250 years later in history than others we also show that the food problem has important implications for growth miracles and the speed at which a country converges to its balanced growth path

on the heterogeneity of sectoral growth and structural dynamics evidence from austrian manufacturing industries this article studies the factors driving structural dynamics across austrian manufacturing industries using a structural vector autoregressive model svar framework we identify sectoral labour productivity and demand shocks that are orthogonal to aggregate shocks we analyse the sectoral impulse response patterns and find that the effect of industry labour productivity shocks on industry output growth is quite heterogeneous we devise a taxonomy that allows us to classify industries according to the effect productivity and demand shocks have on output growth we also show that productivity shocks are quite heterogeneous not just across industries but also over time whereas shocks to sectoral demand growth are more systematic we test the taxonomy in a panel regression and are able to confirm our sector specific findings industry demand shocks and aggregate productivity and demand shocks lead always to an increase in industry output and industry employment

the role of product market regulations in the process of structural change abstract the sectoral allocation of labor differs considerably across developed economies even in the presence of similar patterns of structural change a general equilibrium model that captures the stylized facts of structural change is presented in this framework economy wide product market regulations hinder the development of dynamic sectors such as service industries this is consistent with the negative cross country relationship between product market regulations and the service employment share discussed in the paper additionally the model suggests that higher service prices and rents in regulated economies reduce labor supply providing a rationale for the negative association between product market regulations and the employment rate previously found in the literature

global population growth technology and malthusian constraints a quantitative growth theoretic perspective we structurally estimate a two sector schumpeterian growth model with endogenous population and finite land reserves to study the long run evolution of global population technological progress and the demand for food the estimated model closely replicates trajectories for world population gdp sectoral productivity growth and crop land area from 1960 to 2010 projections from 2010 onwards show a slowdown of technological progress and because it is a key determinant of fertility costs significant population growth by 2100 global population reaches 12 4 billion and agricultural production doubles but the land constraint does not bind because of capital investment and technological progress

structural transformation marketization and household production around the world we provide evidence on household and market production in 36 countries since 1960 on average the household sector accounts for almost half of total hours worked as gdp per capita increases the employment share of household production in total hours worked initially declines and then hardly changes while the employment shares of market goods and services decrease and increase estimating the value added of household production yields similar patterns labor productivity of household production is lower than and positively correlated with that in the market these findings can be used as an input into quantitative work involving household production

conformism and structural change using a simple multisector model of endogenous growth we show that commodity specific consumption externalities can be a source of structural change when the degrees of consumption externalities are different between goods each sector grows at a different rate however the aggregate economy exhibits balanced growth in that capital stock and expenditure grow at the same constant rate a three sector version of our model may reconcile kaldor s stylized facts with empirically plausible profiles of industrial structure transformation

economic growth size of the agricultural sector and urbanization in africa this paper uses variations in international commodity prices and rainfall to construct instrumental variables estimates of the within country effect that changes in the size of the agricultural sector and gdp per capita growth have on the urbanization rate for a panel of 41 african countries during the period 1960 2007 the paper s three main findings are that i decreases in the share of agricultural value added lead to a significant increase in the urbanization rate ii conditional on changes in the share of agricultural value added gdp per capita growth does not significantly affect the urbanization rate iii increases in the urbanization rate had a significant negative average effect on gdp per capita growth

trading down and the business cycle abstract we document two facts first during the great recession consumers traded down in the quality of the goods and services they consumed second the production of low quality goods is less labor intensive than that of high quality goods when households traded down labor demand fell increasing the recession s severity we find that the trading down phenomenon accounts for a substantial fraction of the decline in u s employment in the recent recession we show that embedding quality choice in a business cycle model improves the model s amplification and comovement properties

structural transformation and comparative advantage implications for small open economies data from the last half century show that revealed comparative advantage in agriculture manufacturing is negatively positively associated with the rate of decline in labour share in agriculture motivated by this finding the author constructs and calibrates a simple open economy model where there is learning by doing in manufacturing and industry supplied inputs to agricultural production this paper focuses on the effects of comparative advantage and learning by doing on structural transformation and calibrate the model to the us and the uk data to estimate key parameters of the model quantitative experiments show that holding constant other factors a small difference in a country s comparative advantage can account for a large variation in structural transformation for open economies which does not require nearly as much differential productivity growth as in closed economy models

allocating uncertain and unresponsive resources an experimental approach we identify an important class of economic problems that arise naturally in several applications the allocation of multiple resources when there are uncertainties in demand or supply unresponsive supplies no inventories and fixed capacities and significant demand indivisibilities rigidities examples of such problems include scheduling job shops airports or supercomputers zero inventory planning and the allocation and pricing of nasa s planned space station using experimental methods we show that the two most common organizations used to deal with this problem markets and administrative procedures can perform at very low efficiencies 60 65 efficiency in a seemingly robust example thus there is a need to design new mechanisms that more efficiently allocate resources in these environments we develop and analyze two mechanisms that arise naturally from auctions used to allocate single dimensional goods these new mechanisms involve computer assisted coordination made possible by the existence of networked computers both mechanisms significantly improve on the performance of administrative and market procedures

quadratic core selecting payment rules for combinatorial auctions we report on the use of a quadratic programming technique in recent and upcoming spectrum auctions in europe specifically we compute a unique point in the core that minimizes the sum of squared deviations from a reference point for example from the vickrey clarke groves payments analyzing the karush kuhn tucker conditions we demonstrate that the resulting payments can be decomposed into a series of economically meaningful and equitable penalties furthermore we discuss the benefits of this combinatorial auction explore the use of alternative reserve pricing approaches in this context and indicate the results of several hundred computational runs using cats data

frontiers in spectrum auction design abstract spectrum auction design has seen number innovations in the recent years regulators have used various types of combinatorial auction formats including simple ascending combinatorial clock auctions and first price sealed bid combinatorial auctions the simultaneous multi round auction smra and the two stage combinatorial clock auction cca are the most wide spread auction formats for spectrum sales to date we provide an accessible overview of strategic problems in these auction formats and summarize research challenges in this field for a broader audience of readers in industrial organization

simplified mechanisms with an application to sponsored search auctions abstract a mechanism can be simplified by restricting its message space if the restricted message spaces satisfy a certain outcome closure property then the simplification is tight for every e 0 any e nash equilibrium of the simplified mechanism is also an e nash equilibrium of the unrestricted mechanism prominent auction and matching mechanisms are tight simplifications of mechanisms studied in economic theory and often incorporate price adjustment features that facilitate simplification the generalized second price auction used for sponsored search advertising is a tight simplification of a series of second price auctions that eliminates the lowest revenue equilibrium outcomes and leaves intact only higher revenue equilibria

structural change in a multisector model of growth we study a multi sector model of growth with differences in tfp growth rates across sectors and derive sufficient conditions for the coexistence of structural change characterized by sectoral labour reallocation and constant aggregate growth path the conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists we present evidence from us two digit industries that is consistent with our predictions about structural change and successfully calibrate the historical shift from agriculture to manufacturing and services we show quantitatively that reasonable deviations from our conditions do not have a big impact on the properties of the model

is physical investment the key to china s growth miracle i introduction unprecedented high rates of economic growth in china over the past decades have stimulated a wide interest among researchers and policymakers in establishing whether rapid physical capital accumulation is the main driving force behind such outstanding growth performance and whether it suffices to sustain china s rapid economic growth in the next decades by exploiting the different implications that the relation between investment and growth has according to the neoclassical paradigm pioneered by solow 1956 and cass 1965 and endogenous growth models of the ak type this paper will attempt to test the empirical validity of the ak model for the chinese economy the main difference between the ak model and the solow model is that the former allows for the existence of constant returns to a sufficiently broad definition of capital which in turn enables investment to have a long run impact on growth in contrast under the neoclassical paradigm diminishing returns to reproducible capital leads inevitably to only temporary growth effects along the transitional path and long run growth depends on exogenous technological progress constant returns to reproducible capital characterizing linear accumulation driven models may stem from different sources like 1 positive externalities as in the models of frankel 1962 lucas 1988 and romer 1986 2 bounding the marginal product of reproducible factors away from zero jones and manuelli 1990 or 3 the existence of constant returns to all accumulable factors characterizing the different sectors of the economy barro 1990 rebelo 1991 according to standard linear accumulation driven models steady state output growth directly depends on the total investment rate in physical capital hence the dynamics of output growth should behave similarly to the dynamics of the investment rate as noted by jones 1995a a hallmark of the endogenous growth literature implies that any large permanent change in total investment should translate into a permanent change in long run growth in the same direction jones 1995a constitutes the first attempt at testing the ak type growth models using a time series framework his sample includes 15 organization for economic co operation and development oecd countries with data spanning over the period 1950 1988 he shows that the investment share in producer durables and to a lesser extent the total investment rate presents an upward deterministic trend and is generally found nonstationary when augmented dickey fuller adf 1979 tests are applied in contrast rates of economic growth remain fairly stable jones then claims that the fact that output growth rates exhibit no large permanent movements imposes a strong and testable restriction on endogenous growth models if an endogenous growth model predicts that permanent movements in some variable x have permanent effects on growth then either a x must exhibit no large persistent movements or b some other variable or variables must also have persistent effects on growth that offset the movements of x in a way that is determined by the endogenous growth model jones 1995a 502 despite the considerable effort using this framework to try to test the empirical validity of ak type growth models for the oecd countries jones 1995a li 2002 romero avila 2006 no work has been conducted along these lines for the chinese economy this is surprising because this issue should be particularly important for a country like china which is expected to become the leading economy in the coming decades with a population more than 1 3 billion which is more than four times the population of the united states this paper tries to fill this gap in the literature by applying jones test to the chinese economy over the past five decades the chinese economy has shown spectacular growth performance with an average annual growth rate of real per capita gross domestic product gdp equal to 6

a dynamic option value for institutional change marketable property rights in the sahel in this article we use dynamic programming methods to create an option value measure of the value of the institutional innovation of marketable property rights this measure has two properties that are important to understanding institutional change it is truly dynamic and it allows for agent heterogeneity in the case of west africa we find that the collapse of customary risk management institutions is a vital part of the demand for marketability rights as agents struggle to smooth income and consumption in its wake we find that the social efficiency implications of this demand for institutional innovation are ambiguous

changes in sectoral composition associated with economic growth in this paper the author uses dynamic general equilibrium methods to examine the interrelationship between sectoral composition and growth she shows that growth is affected by sectoral composition and vice versa the model is basically a solow model of sustained growth with multiple consumption goods and nonhomothetic preferences each consumption good is produced using different factor intensities the rate of exogenous technological change is different in each sector nonhomotheticity of preferences drives the result that sectoral composition affects growth rates copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

an equilibrium analysis of the simultaneous ascending auction we provide a bayes nash equilibrium analysis of the simultaneous ascending auction saa when local bidders interested in a single item compete against global bidders interested in aggregating many items we first assume that each local bidder values only a specific item e g the license for the region where it has monopoly power and that global bidders valuation functions are convex for this environment we show that a global bidder faces an exposure problem with adverse consequences for revenue and efficiency in the limit when the number of items grows large the saa is revenue and efficiency equivalent to the vickrey clarke groves vcg mechanism we extend our analysis to include the case where items are substitutes for local bidders so that price arbitrage will occur as observed in many spectrum auctions this environment which combines substitutes and complements results in an aggravated exposure problem consequently the saa is no longer efficient and may yield dramatically lower revenues than the vcg mechanism finally we relax the assumption that global bidders valuation functions are convex by considering an environment with medium sized global bidders who demand fewer than all items we show that global bidders divide the market at low prices when market sharing is feasible while they engage in mutually destructive bidding when there is a fitting problem in both cases the saa again underperforms relative to the vcg mechanism

a new and improved design for multiobject iterative auctions in this paper we present a new improved design for multiobject auctions and report on the results of experimental tests of that design we merge the better features of two extant but very different auction processes the simultaneous multiple round smr design used by the fcc to auction the electromagnetic spectrum and the adaptive user selection mechanism ausm of banks et al 1989 allocating uncertain and unresponsive resources an experimental approach rand journal of economics vol 20 no 1 pp 1 25 then by adding one crucial new feature we are able to create a new design the resource allocation design rad auction process which performs better than both our experiments demonstrate that the rad auction achieves higher efficiencies lower bidder losses higher net revenues and faster times to completion without increasing the complexity of a bidder s problem

the environmental kuznets curve and the structural change hypothesis we provide a very simple macroeconomic investigation of the role that structural changes might play in generating inverted u shaped income pollution relationships differently from previous research which mainly focuses on empirical static or general equilibrium models we develop a standard balanced growth path bgp analysis we show that along the bgp equilibrium an inverted u shaped income pollution relationship may occur as a response to structural changes but whether this is the case or not it will crucially depend upon the magnitude of a production externality parameter moreover we show that the negative relationship between income and pollution can only be a transitory phenomenon and in the long run pollution will increase as income rises generating overall an n shaped pattern

the u s demographic transition between 1800 and 1940 the u s went through a dramatic demographic transition in 1800 the average woman had 7 children and 94 percent of the population lived in rural areas by 1940 the average woman birthed just 2 kids and only 43 percent of populace lived in the country the question is what accounted for this shift in the demographic landscape the answer given here is that technological progress in agriculture and manufacturing explains these facts

compact bidding languages and supplier selection for markets with economies of scale and scope preference elicitation is a fundamental problem in single unit combinatorial auctions but it becomes prohibitive even for small instances of multi unit combinatorial auctions the bidders cannot express their preferences exactly as this would take a huge number of bids typically leading to inefficient allocations hence markets with economies of scale and scope require more compact and yet expressive bidding languages in this thesis we propose an expressive bidding language allowing bidders to describe the characteristics of their cost functions bidders in these auctions can specify various discounts and markups and specify pricing rules as logical functions finding the optimal allocation given these pricing rules is a strongly np hard optimization problem and we propose a mixed integer program to solve it based on field data we introduce a multi item cost function and provide extensive computational experiments to explore the computational burden and the impact of different language features on the computational effort and total spend of the auctioneer in addition we explore characteristics of the knowledge representation of the bidding language

services sector and economic growth in india this study examines the long run equilibrium and short run dynamic relationship between services sector and gross domestic product gdp and between services and nonservices sectors in india the model is estimated using the optimal single equation and the maximum likelihood system estimators all the estimators consistently suggest the cointegrating relationship between services sector and gdp as well as between services and nonservices sectors the estimates of long run elasticity parameters are statistically significant and dimensionally consistent across the estimators the conventional cumulative sum cusum and the new cusum and moving sum mosum tests suggest the stability of the equilibrium residuals and reinforce the cointegrating relationship between the model series the error correction model provides some support for unidirectional granger causality from services sector to gdp the impulse response and variance decomposition analyses instead suggest the bidirectional causality between servic

tenure constraints and carbon forestry in africa our analysis shows that landowners with customary tenure in africa can be efficient providers of carbon forestry if tree planting helps secure their permanent claims to the land if the farmer s tree planting can reduce the threat of eviction the amount of land allocated to carbon forestry may be greater or lesser than under private ownership but it is always more than if tenure security is completely absent our results support the view that carbon forestry schemes should accommodate traditional african customary tenure systems and if designed successfully can both promote carbon forestry and benefit the poor

can total factor productivity explain value added growth in services abstract this paper examines the factors responsible for generating the services led growth witnessed in the indian economy during 1980 2005 a sectoral growth accounting exercise shows that total factor productivity tfp growth was the fastest for services moreover this tfp increase was significant in accounting for service sector value added growth a growth model with agriculture industry and services as three principal sectors is calibrated to indian data using sectoral tfp growth rates the baseline model performs well in accounting for the evolution of value added shares and their growth rates but is unable to capture sectoral employment share trends the performance of the model with respect to value added shares improves when the post 1991 increase in service sector tfp growth following the inception of market based liberalization reforms is accounted for a modified version of the model with public capital can better track trends in sectoral employment shares

equilibrium credit rationing of small farm agriculture it is often argued that externally imposed contractual restrictions lead to inequitable credit rationing this paper argues that unrestricted laissez faire markets may also inequitably ration credit a formal model which grants borrowers autonomy in credit application and use demonstrates that adverse incentive and selection effects may cause banks to endogenously impose interest rate restrictions and ration small farms out of the credit market consequently liberalization of financial markets may be insufficient to guarantee small farms access to credit