Scale and the origins of structural change

doi:10.1016/j.jet.2010.11.007

Journal of Economic Theory

Volume 147, Issue 2, March 2012, Pages 684-712

https://doi.org/10.1016/j.jet.2010.11.007 Get rights and content

Abstract

We consider broad patterns of structural change: (i) sectoral reallocations, (ii) rich movements of productive activities between home and market, and (iii) an increase in establishment size, especially in manufacturing. We extend these facts and develop a unified model explaining them. The crucial distinction across manufacturing, services and home production is the scale of the productive unit. In manufacturing, scale technologies lead to industrialization and marketization. In services, they lead to marketization and later demarketization of services. A later increase in the scale of services could yield a decline in industry and a rise in services, consistent with the data.

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Scale and the origins of structural change

Abstract

J. Monet. Econ.

Rev. Econ. Dynam.

Carnegie–Rochester Conf. Ser. Public Pol.

Rev. Econ. Dynam.

Capital deepening and nonbalanced economic growth

J. Polit. Economy

Nineteenth century american industrial development through the eyes of the census of manufactures: A new resource for historical research

Hist. Methods

Market Services and the Productivity Race: British Performace in International Perspective

Scale and Scope