The Effect of Consumption and Production Structure on Growth and Distribution: A Micro to Macro Model

39 Pages Posted: 22 Dec 2009

See all articles by Tommaso Ciarli

Tommaso Ciarli

SPRU, University of Sussex

André Lorentz

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Maria Savona

University of Sussex

Marco Valente

University of L'Aquila - Faculty of Economics

Date Written: March 2008

Abstract

The paper offers a theoretical analysis of long-run economic growth as an outcome of structural changes. We model the microeconomic behaviour of firms in the final good and capital sectors, and the evolution of classes of workers/consumers. We carefully craft economic behaviour onto empirical evidence, and solve the model numerically. The results illustrate the microeconomic properties of the simulated growth patterns. In particular, we observe and explain the interactions between technological change, firm organization, income distribution, consumption behaviour and growth. We confirm the relevance and interdependence of these structural changes, and underline their microeconomic sources.

Suggested Citation

Ciarli, Tommaso and Lorentz, André and Savona, Maria and Valente, Marco, The Effect of Consumption and Production Structure on Growth and Distribution: A Micro to Macro Model (March 2008). Metroeconomica, Vol. 61, Issue 1, pp. 180-218, February 2010. Available at SSRN: https://ssrn.com/abstract=1526830 or http://dx.doi.org/10.1111/j.1467-999X.2009.04069.x

Tommaso Ciarli (Contact Author)

SPRU, University of Sussex ( email )

Jubilee Building
University of Sussex
Falmer, Brighton, Sussex BN1 9SL
United Kingdom

André Lorentz

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

Maria Savona

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Marco Valente

University of L'Aquila - Faculty of Economics ( email )

Piazza del Santuario, 19
Roio Poggio, AQ, 67040
Italy

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