scholarly journals Structural Change With Long‐Run Income and Price Effects

Econometrica ◽  
2021 ◽  
Vol 89 (1) ◽  
pp. 311-374 ◽  
Author(s):  
Diego Comin ◽  
Danial Lashkari ◽  
Martí Mestieri
Keyword(s):  
Structural Change ◽  
Developing Economies ◽  
The United States ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
Household Level ◽  
Income Effects ◽  
Long Run ◽  
Level Data ◽  
Price Effects

We present a new multi‐sector growth model that features nonhomothetic, constant elasticity of substitution preferences, and accommodates long‐run demand and supply drivers of structural change for an arbitrary number of sectors. The model is consistent with the decline in agriculture, the hump‐shaped evolution of manufacturing, and the rise of services over time. We estimate the demand system derived from the model using household‐level data from the United States and India, as well as historical aggregate‐level panel data for 39 countries during the postwar period. The estimated model parsimoniously accounts for the broad patterns of sectoral reallocation observed among rich, miracle, and developing economies. Our estimates support the presence of strong nonhomotheticity across time, income levels, and countries. We find that income effects account for the bulk of the within‐country evolution of sectoral reallocation.

U.S. ELASTICITIES OF SUBSTITUTION AND FACTOR AUGMENTATION AT THE INDUSTRY LEVEL

2012 ◽  
Vol 17 (4) ◽  
pp. 861-897 ◽  
Author(s):  
Andrew T. Young
Keyword(s):  
Manufacturing Sector ◽  
Weighted Average ◽  
Value Added ◽  
The United States ◽  
Large Majority ◽  
Elasticity Of Substitution ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
First Order ◽  
Industry Level

We provide industry-level estimates of the elasticity of substitution (σ) between capital and labor in the United States. We also estimate rates of factor augmentation. Aggregate estimates are produced. Our empirical model comes from the first-order conditions associated with a constant–elasticity of substitution production function. Our data represent 35 industries at roughly the 2-digit SIC level, 1960–2005. We find that aggregate U.S. σ is likely less than 0.620. σ is likely less than unity for a large majority of individual industries. Evidence also suggests that aggregate σ is less than the value-added share-weighted average of industry σ's. Aggregate technical change appears to be net labor–augmenting. This also appears to be true for the large majority of individual industries, but several industries may be characterized by net capital augmentation. When industry-level elasticity estimates are mapped to model sectors, the manufacturing sector σ is lower than that of services; the investment sector σ is lower than that of consumption.

scholarly journals Substitution between Immigrant and Native Farmworkers in the United States: Does Legal Status Matter?

2019 ◽  
Vol 10 (1) ◽  
Author(s):  
Xuan Wei ◽  
Gülcan Önel ◽  
Zhengfei Guan ◽  
Fritz Roka
Keyword(s):  
United States ◽  
Legal Status ◽  
Substitution Effect ◽  
The United States ◽  
Elasticity Of Substitution ◽  
Immigrant Workers ◽  
Policy Debate ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
Unauthorized Immigrant

AbstractThe policy debate surrounding the employment of immigrant workers in U.S. agriculture centers around the extent to which immigrant farmworkers adversely affect the economic opportunities of native farmworkers. To help answer this question, we propose a three-layer nested constant elasticity of substitution (CES) framework to investigate the substitutability among heterogeneous farmworker groups based on age, skill, and legal status utilizing National Agricultural Workers Survey (NAWS) data from 1989 through 2012. We use farmwork experience and type of task performed as alternative proxies for skill to disentangle the substitution effect between U.S. citizens, authorized immigrants, and unauthorized immigrant farmworkers. Results show that substitutability between the three legal status groups is small; neither authorized nor unauthorized immigrant farmworkers have a significant impact on the employment of native farmworkers.

scholarly journals Precautionary Saving and Consumption Fluctuations

2005 ◽  
Vol 95 (4) ◽  
pp. 1119-1143 ◽  
Author(s):  
Jonathan A Parker ◽  
Bruce Preston
Keyword(s):  
The United States ◽  
Precautionary Saving ◽  
Consumption Growth ◽  
Average Growth ◽  
Household Level ◽  
Nondurable Goods ◽  
Consumption Expenditures ◽  
New Information ◽  
Level Data ◽  
Consumption Fluctuations

This paper uses the consumption Euler equation to derive a decomposition of consumption growth into four sources. These four sources are new information, and three sources of predictable consumption growth: intertemporal substitution, changes in the preferences for consumption, and incomplete markets for consumption insurance. Using household-level data, we implement this decomposition for the average growth rate of consumption expenditures on nondurable goods in the United States from 1982 to 1997. The economic importance of precautionary saving rivals that of the real interest rate, but the relative importance of each source of movement in the volatility of consumption is not precisely measured.

scholarly journals Estimating the Demand for Wine Using Instrumental Variable Techniques

2008 ◽  
Vol 3 (2) ◽  
pp. 172-184 ◽  
Author(s):  
Steven S. Cuellar ◽  
Ryan Huffman
Keyword(s):  
Instrumental Variable ◽  
Jel Classification ◽  
Wine Industry ◽  
Chain Stores ◽  
Income Effects ◽  
Retail Chain ◽  
Price Point ◽  
Level Data ◽  
Price Effects ◽  
Scan Data

AbstractThe demand for wine is generally estimated on an aggregate level as a single commodity. However, as recent history shows us, the demand for wine not only varies considerably by varietal, but also by price point within each varietal. As a result, although estimates of the demand for wine may be beneficial to the wine industry as a whole, they provide little benefit to individual wine producers. Using scan data of purchases from US retail chain stores, this paper uses store keeping unit (sku) level data to overcome the limitations of prior research on the demand for wine by providing estimates for the demand for wine by varietal and price point. We also provide estimates of own price effects, income effects by color, varietal and price segment. Problems of endogeneity inherent in demand estimation are corrected by utilizing a novel instrumental variable technique using grape prices as the instrument. (JEL Classification: C23, D12)

scholarly journals Job Polarization and Structural Change

2018 ◽  
Vol 10 (1) ◽  
pp. 57-89 ◽  
Author(s):  
ZsÓfia L. Bárány ◽  
Christian Siegel
Keyword(s):  
United States ◽  
Structural Change ◽  
Simple Model ◽  
The United States ◽  
Average Wage ◽  
High Wage ◽  
Relative Wages ◽  
The Past ◽  
Long Run ◽  
Job Polarization

We document that job polarization—contrary to the consensus— has started as early as the 1950s in the United States: middle-wage workers have been losing both in terms of employment and average wage growth compared to low- and high-wage workers. Given that polarization is a long-run phenomenon and closely linked to the shift from manufacturing to services, we propose a structural change driven explanation, where we explicitly model the sectoral choice of workers. Our simple model does remarkably well not only in matching the evolution of sectoral employment, but also of relative wages over the past 50 years. (JEL E24, J21, J22, J24, J31)

scholarly journals Two Perspectives on Preferences and Structural Transformation

2013 ◽  
Vol 103 (7) ◽  
pp. 2752-2789 ◽  
Author(s):  
Berthold Herrendorf ◽  
Richard Rogerson ◽  
Ákos Valentinyi
Keyword(s):  
United States ◽  
Structural Transformation ◽  
Service Sector ◽  
Value Added ◽  
The United States ◽  
Service Industries ◽  
Relative Prices ◽  
Income Effects ◽  
Output Structure ◽  
Price Effects

We assess the empirical importance of changes in income and relative prices for structural transformation in the postwar United States. We explain two natural approaches to the data: sectors may be categories of final expenditure or value added; e.g., the service sector may be the final expenditure on services or the value added from service industries. We estimate preferences for each approach and find that with final expenditure income effects are the dominant force behind structural transformation, whereas with value-added categories price effects are more important. We show how the input-output structure of the United States can reconcile these findings. (JEL E21, L16)

The Oxford Handbook of Structural Transformation

2019 ◽  
Keyword(s):  
Structural Change ◽  
Structural Transformation ◽  
Relative Price ◽  
Financial Reforms ◽  
Income Effects ◽  
Existing Structures ◽  
Industrial Parks ◽  
Economic Forces ◽  
Price Effects ◽  
The Relationship

This book examines a variety of topics relating to structural transformation, such as why such transformations are associated with persistently high unemployment; the ‘flying-geese’ theory introduced by Japanese economist Kaname Akamatsu in the mid-1930s; mutual, two-way dependence of structural transformation and food security; a competitiveness-based view of structural transformation; the link between world trade and structural change from 1800 to present; the relationship between financial reforms, financial development, and structural change; sustainable structural change in the context of global value chains; and the commonly used strategies to build effective clusters and industrial parks. The book also discusses the specific problems that arise when composing an index of structural change and development, and suggests ways to address them; how structural change can be formally modelled in New Structural Economics (NSE); and some of the key elements of the knowledge accumulated in development economics. Furthermore, it identifies three key economic forces that drive structural transformation: the first emphasizes income effects, while the other two both emphasize relative price effects. The experiences of regions and countries such as Latin America, the West African Economic and Monetary Union (WAEMU), India, Egypt, Viet Nam, China, Korea, Taiwan, Ethiopia, and Tanzania with respect to structural transformation are also analysed. Finally, the book considers what is harmful in the existing structures, what goals we want any new structures to serve, and what structures would serve the chosen goals.

The Local Economic Effects of Public Housing in the United States, 1940–1970

2013 ◽  
Vol 73 (4) ◽  
pp. 978-1016 ◽  
Author(s):  
Katharine L. Shester
Keyword(s):  
Public Housing ◽  
Low Income ◽  
Family Income ◽  
The United States ◽  
Economic Effects ◽  
Negative Effects ◽  
Long Run ◽  
Level Data ◽  
The 1960S ◽  
Lower Population

Between 1933 and 1973 the federal government funded the construction of over 1 million units of low-rent housing. Using county-level data, I find that communities with high densities of public housing had lower median family income, lower median property values, lower population density, and a higher percentage of families with low income in 1970. However, I find no negative effects of public housing in 1950 or 1960, implying that long-run negative effects only became apparent in the 1960s. The effects found in 1970 are partially due to a decline in human capital.

scholarly journals Structural Change with Long-run Income and Price Effects

2015 ◽  
Author(s):  
Diego Comin ◽  
Danial Lashkari ◽  
Martí Mestieri
Keyword(s):  
Structural Change ◽  
Long Run ◽  
Price Effects

Financial inclusion, biometric identification and mobile: unlocking the JAM trinity

2017 ◽  
Vol 16 (2) ◽  
pp. 190-213 ◽  
Author(s):  
Saibal Ghosh
Keyword(s):  
Prime Minister ◽  
Financial Inclusion ◽  
Mobile Telephony ◽  
Biometric Identification ◽  
Content Type ◽  
Household Level ◽  
Long Run ◽  
Level Data ◽  
Short Run ◽  
Key Variables

Purpose The purpose of the paper is to understand the interlinkage with financial inclusion and how it interacts with biometric identification. To investigate this in detail, the authors employ household-level data on India to examine the interlinkage among Prime Minister Jan Dhan Yojana (PMJDY) account, Aadhaar card and mobile telephony. Design/methodology/approach Given the survey data, the authors employ 3 stage least squares (3SLS) methodology to explore the association among these key variables, while controlling for other household, district and economy-wide factors. Findings The findings provide strong evidence of complementarity among these variables, with each tending to reinforce the other. This complementarity is reflected primarily in respect of PMJDY and Aadhaar, but much less so with regard to mobile telephony. Additionally, this complementarity is manifest more prominently in the long run, although it is much less so in the short run. Originality/value To the best of the authors’ knowledge, this is one of the earliest studies for India to systematically examine the Jan-Dhan-Aadhaar-Mobile (JAM) trinity.

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