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Sectoral Technology and Structural Transformation

Author

Listed:
  • Berthold Herrendorf
  • Christopher Herrington
  • Ákos Valentinyi
Abstract
We assess how the properties of technology affect structural transformation, i.e., the reallocation of production factors across the broad sectors of agriculture, manufacturing, and services. To this end, we estimate sectoral constant elasticity of substitution (CES) and Cobb-Douglas production functions on postwar US data. We find that differences in technical progress across the three sectors are the dominant force behind structural transformation whereas other differences across sectoral technology are of second order importance. Our findings imply that Cobb-Douglas sectoral production functions that differ only in technical progress capture the main technological forces behind the postwar US structural transformation. (JEL E16, E25, O33, O47)

Suggested Citation

  • Berthold Herrendorf & Christopher Herrington & Ákos Valentinyi, 2015. "Sectoral Technology and Structural Transformation," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(4), pages 104-133, October.
    • Handle: RePEc:aea:aejmac:v:7:y:2015:i:4:p:104-33
    Note: DOI: 10.1257/mac.20130041
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    References listed on IDEAS

    as
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    4. Ezra Oberfield & Devesh Raval, 2021. "Micro Data and Macro Technology," Econometrica, Econometric Society, vol. 89(2), pages 703-732, March.
    5. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
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    More about this item

    JEL classification:

    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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