Structural Change in Investment and Consumption: A Unified Analysis

• Berthold Herrendorf ^[1] ; Richard Rogerson ^[2] ; Ákos Valentinyi ^[3]
  1. [1] Arizona State University

     Arizona State University

     Estados Unidos

     
  2. [2] Princeton University

     Princeton University

     Estados Unidos

     
  3. [3] University of Manchester

     University of Manchester

     Reino Unido

     

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• Localización: Review of economic studies, ISSN 0034-6527, Vol. 88, Nº 3, 2021, págs. 1311-1346
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • The structural-change literature typically assumes that investment is produced in manufacturing. We establish that this assumption is counterfactual: in the postwar U.S., the share of services value added in investment expenditure has been steadily growing. We develop a new model that features structural change in investment and consumption, characterize its equilibrium properties, and provide empirical support for it. We establish that modelling structural change in investment leads to three novel insights: constant TFP growth in all sectors is inconsistent with the existence of aggregate balanced growth with structural change; the sector with the slowest TFP growth absorbs all resources asymptotically; technical change is endogenously investment-biased.