Structural change and economic growth: Advances and limitations of Kaldorian growth models

Guilherme Riccioppo Magacho

Abstract


Why some developing countries were able to reduce the income gap to developed economies and others were not? Although many different approaches have addressed this issue, few of them take into account one of the most evident characteristics of this phenomenon: the process of structural change. This paper reviews the theoretical basis of the Kaldorian approach for the relationship between structural change and countries’ long-term economic growth, emphasising its recent developments and its limitations.

According to Kaldor, structural change towards specific sectors increases continuously countries’ growth rates through a cumulative causation process. Although the author stressed it exhaustively, only recently Kaldorian models have incorporated this feature explicitly. Nevertheless, these models still face significant limitations to show how a cumulative causation process takes place in an open economy.

Keywords


Structural Change, Multisectoral Growth Models, Kaldorian Growth Models, Export-led Growth

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References


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DOI: http://dx.doi.org/10.13133/2037-3643_70.280_3

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Reg. Tribunale di Roma n.377/2009 del 19/11/2009