Sectoral Technology and Structural Transformation

Arbeitspapier

This paper assesses the importance for structural transformation of three features of sectoral technology: labor-augmenting technological progress, capital intensity, and substitutability between capital and labor. We estimate CES production functions for agriculture, manufacturing, and services on postwar US data and compare them with Cobb-Douglas production functions with different and with equal capital shares. We find that sectoral differences in labor-augmenting technological progress are the main force behind the trends in observed relative prices and sectoral labor. As a result, sectoral Cobb-Douglas production functions with equal capital shares (which by construction abstract from differences in the elasticity of substitution and in capital shares) do a good job of capturing the postwar US structural transformation.

Object Details

• ISBN: 978-615-5243-36-3
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IEHAS Discussion Papers ; No. MT-DP - 2012/32

Classification and Topics

• Classification: Wirtschaft ; Macroeconomic Analyses of Economic Development ; Industrialization; Manufacturing and Service Industries; Choice of Technology
• Subject: CES production function ; Cobb-Douglas production function ; structural transformation ; elasticity of substitution ; Strukturwandel ; Faktorsubstitution ; CES-Produktionsfunktion ; Cobb-Douglas-Produktionsfunktion ; Technischer Fortschritt ; Mehrsektoren-Modell ; Theorie ; Schätzung ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Herrendorf, Berthold ; Herrington, Christopher ; Valentinyi, Ákos
• Event: Veröffentlichung
• (who): Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies
• (where): Budapest
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/108276
• Last update: 10.03.2025, 11:41 AM CET