Business Intelligence

Numerical Explorations Of The Ngai-Pissarides Model Of Growth And Structural Change

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Executive Summary

In this paper, the authors specialize the Ngai-Pissarides model of growth and structural change to the case of three sectors, representing the primary (agriculture, mining), secondary (construction, manufacturing) and tertiary (services) sectors. On that basis they explore the dynamic properties of the model along the transition path to the steady-state equilibrium by numerical methods. Their explorations show that the model misses several stylized facts of structural change among these sectors. They propose several extensions of the model to align the model more closely with the facts.

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