Kuznets-Kaldor-Puzzle, Neutral Structural Change and Independent Preferences and Technologies
77 Pages Posted: 12 Mar 2012
Date Written: March 12, 2012
The Kuznets-Kaldor stylized facts are one of the most striking empirical regularities of the development process in industrialized countries: While massive factor reallocation across technologically distinct sectors takes place, the aggregate ratios of the economy are quite stable. This implies that cross-technology factor reallocation has a relatively weak impact on aggregates, which is a puzzle from the theoretical point of view. We provide a model which can explain the Kuznets-Kaldor-puzzle by independent preferences and technologies. Furthermore, we show by empirical evidence that this explanation is in line with 55% of structural change in the USA between 1948 and 1987.
Keywords: Kaldor facts, Kuznets facts, structural change, factor reallocation, sectors, balanced growth, unbalanced growth, neoclassical growth models
JEL Classification: O14, O41, E13
Suggested Citation: Suggested Citation