Structural Change and Economic Growth: Analysis within the Partially Balanced Growth-Framework

The term “structural change” refers to changes in the sector-structure of an economy, where “sectors” are some theoretical “groups” of goods and services (e.g. agricultural sector, manufacturing sector, services sector). In fact, structural change is one of the most striking empirical facts of the development process; most prominent examples of structural change are “industrialization” and “transition to a services economy”. Even more importantly, it is well known that structural change has some key impacts on economy and society, especially on (aggregate) economic growth. Although structural change has been known for a long time, structural change theory has not been a mainstream research topic, especially not in the growth theory. Some new research introduced a new approach to studying structural change, which is more in line with the mainstream growth theory. I name this approach “partially balanced growth school” (“PBGP-school”). Broadly speaking, this new school of structural change can be characterized upon two attributes (a mathematical one and a theoretical one): (1) The concept of “partially balanced growth” is used to study the differential-equation-systems of the theoretical models. (2) The modelling framework may be regarded as “neoclassical” in many ways. I elaborate mathematical and theoretical foundations of the PBGP-school; especially, I discuss the usage of partially balanced growth paths in structural change modelling and the integration of structural change into the mainstream neoclassical growth model (Ramsey-Cass-Koopmans-model). I systematize the literature on structural-change-modelling and integrate/classify the new PBGP-school into this scheme. Finally, I use the concepts of the PBGP-school for analysing some actual economic topics related to structural change and (long-run) economic growth. Especially, by using the PBGP-methods I analyse the Kuznets-Kaldor-puzzle, the impacts of Offshoring on real GDP-growth and the effects of demand-shifts associated with population ageing. In fact, my work implies that the methods of the PBGP-school seem to be valuable tools for analysing structural change. Furthermore, as I hope, my work provides some new and interesting insights into structural change and economic growth. In Chapter I, I provide an introduction to my research. Subsequently in Chapters II and III, I explain and discuss the mathematical and modelling foundations of my research. Chapter IV includes a systematization of structural-change-modelling-literature and the classification of the PBGP-school and of my research. In Chapter V, I present my efforts on modelling the Kuznets-Kaldor-Puzzle, Offshoring and Ageing by using the PBGP-methods. Finally, in Chapter VI there is a summary of my work.