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 . The paper  establishes the mathematical underpinning of the static equilibrium, dynamicequilibrium and structural equilibrium. The generic model and its equilibria are then extended to economies with complicated economic structures consisting of hierarchical production, composite consumption, technology adoption and innovation, infrastructure, and economic and political institutions. The paper concludes with a brief discussion of applications of the proposed methodology to economic development problems in other scenarios.
This paper proposes a framework to model how a country develops its economy by endogenous structural transformation and efficient resource allocation in a market mechanism. To achieve this goal, the paper first summarizes three attributes of economic structures from the literature , namely, structurality, durationality, and transformality , and discuss their implications for methods of economic modeling. Then, with the common knowledge assumption, the paper studies a Ramsey growth model with endogenous structural transformation in which the social planner chooses the optimal industrial structure, recource allocation with the chosen structure, and consumption to maximize the representative household's total utility subject to the resource constraint . The paper next establishes the mathematical underpinning of the static , dynamic, and structural equilibria. The Ramsey growth model and its equilibria are then extended to economies with complicated economic structures consisting of hierarchical production, composite consumption, technology adoption and innovation, infrastructure, and economic and political institutions. The paper concludes with a brief discussion of applications of the proposed methodology to economic development problems in other scenarios.
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The structures, including technologies, industries, infrastructure and institutions, in a country have three attributes
This paper proposes a framework to model how a country develops its economy by endogenous structural transformation and efficient resource allocation in a market mechanism. To achieve this goal, the paper first summarizes three attributes of economic structures from the literature
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. The paper proposes a novel method to model the structural transformation in a market economy. With the
, and discuss their implications for methods of economic modeling. Then, with the
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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
studies a Ramsey growth model with endogenous structural transformation in which the social planner chooses the optimal industrial structure, recource allocation with the chosen structure, and consumption
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utility in a market economy
total utility subject to the resource constraint
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equilibrium, dynamicequilibrium and structural equilibrium. The generic
, dynamic, and structural equilibria. The Ramsey growth