Endowment Structures, Industrial Dynamics, and Economic Growth

By Jiandong Ju, J. Lin, Yong Wang. 2009

179 citations recorded by the source corpus.

This paper develops a dynamic general equilibrium model to explore industrial evolution and economic growth in a closed developing economy. The authors show that industries will endogenously upgrade toward the more capital-intensive ones as the capital endowment becomes more abundant. The model features a continuous inverse-V-shaped pattern of industrial evolution driven by capital accumulation: As the capital endowment reaches a certain threshold, a new industry appears, prospers, then declines and finally disappears. While the industry is declining, a more capital-intensive industry appears and booms, ad infinitum. Explicit solutions are obtained to fully characterize the whole dynamics of perpetual structural change and economic growth. Implications for industrial policies are discussed.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/d14d39ffc122943c44e2a25b929e740370132f11

Citations in the corpus

• New Structural Economics: A Framework for Rethinking Development (2010, unknown): “This pattern, which was documented in the literature by Akamatsu (1962), Chenery (1960) and Kojimas, is formalized in Ju, Lin and Wang (2009) .”
• Manufacturing as the key engine of economic growth for middle-income economies (2017, unknown): “According to Ju, Lin, and Wang (2015), this idea goes back to as early as the Rybczynski Theorem, which states that the capital-intensive sector would expand when the economy becomes more capital abundant.”
• New Structural Economics : A Framework for Rethinking Development (2011, unknown): “However, they must first upgrade their factor Lin 201 at Joint B ank/F und Library on A ugust 12, 2011 w bro.oxfordjournals.org D ow nloaded from endowment structure, which requires their stock of capital to grow more rapidly than the labor force (see Ju, Lin, and Wang 2009).”