Beyond Balanced Growth

Piyabha Kongsamut, Sergio Rebelo, Danyang Xie

NBER Working Paper No. 6159
Issued in September 1997
NBER Program(s):Economic Fluctuations and Growth

One of the most striking regularities of the growth process is the massive reallocation of labor from agriculture into industry and services. Balanced growth models are commonly used in macroeconomics because they are consistent with the well-known Kaldor facts about economic growth. These models are, however, inconsistent with the structural change dynamics that are a central feature of economic development. This paper discusses models with generalized balanced growth paths. These paths retain some of the key features of balanced growth but are consistent with the observed labor reallocations dynamics.

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Document Object Identifier (DOI): 10.3386/w6159

Published: Kongsamut, Piyabha, Sergio Rebelo and Danyang Xie. "Beyond Balanced Growth," Review of Economic Studies, 2001, v68(237,Oct), 869-882. citation courtesy of

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