Two-sector Model Of Economic Growth Research Articles

Industrial structure optimization, economic development factors and regional economic risk prevention in post COVID-19 period: empirical analysis based on panel data of Guangdong regional economy.

In the post-COVID-19 period, the regional economic development gap in Guangdong has expanded and the risk has increased. This is not conducive to building a well-off society in Guangdong in an all-round way. Optimizing the industrial structure, changing the mode of economic growth, preventing regional economic risks, and narrowing the regional economic development gap are the focus of Guangdong governments at all levels. Based on a two-sector economic growth model, the paper uses descriptive statistics and Deng's grey correlation method to analyze the economic development panel data of 21 prefecture-level cities of Guangdong Province from 2011 to 2018, analyzes the characteristics of regional economic development in Guangdong, and makes experimental research of the effect of industrial structure optimization and economic development factors on economic growth in Guangzhou, Zhongshan, Shantou, Maoming and Meizhou at different stages of development. The results show that: there are differences in the industrial structure and the level of economic development in different regions; the rationalization of industrial structure and upgrading of the industrial structure has an impact on economic growth and show different features during different stages; in different stages of economic development, foreign trade, scientific and technological innovation are the main factors affecting regional economic growth. This paper holds that the northwest of Guangdong Province and the Pearl River Delta should formulate industrial structure adjustment policies to promote the rationalization of regional industrial structure, expand foreign trade channels and innovate financing mechanisms, and restrain regional economic risks in combination with regional characteristics. The new development pattern of domestic and international dual circulation and mutual promotion, further expands the level of opening up, effectively playing the role of free trade pilot areas, free trade ports, special economic zones, development zones, bonded areas, and other frontier highlands, improve the level and capacity of foreign trade.

Research on the economic effect of employment structure change in heterogeneous regions: evidence from resource-based cities in China

The Report on the Work of the Chinese Government in 2021 emphasised that stable employment is the foundation of national development. Therefore, adjustment of the employment structure is one of the main routes for sustainable development of resource-based cities. However, the impact of employment structure on sustained economic growth, particularly in heterogeneous regions, has not yet been determined. This study analyses China’s employment structure’s spatial evolution, using panel data from 2004 to 2018 of 115 prefecture-level resource-based cities. It explores the driving factors and spatial effects of employment structure changes on economic growth through an extended two-sector economic growth model and spatial econometric model, and proposes solutions for heterogeneous regions. The results show that the labour productivity of the employed population in the secondary industry is the most important factor affecting economic growth, but the spatial effects of employment structure adjustment on economic growth are different in heterogeneous regions. They further reveal that improving the productivity of the employed population in the secondary industry and building an industrial system according to regional advantages are the top priorities for developing the sustainable economy of resource-based cities.

Delay two-sector economic growth model with a Cobb–Douglas production function

Delay two-sector economic growth model with a Cobb–Douglas production function

Optimal investment for agricultural growth and poverty reduction in the democratic republic of congo a two-sector economic growth model

ABSTRACTWe propose a two-sector economic growth model and solve it numerically using the relaxation algorithm to determine the optimal levels of investment for sustainable agricultural growth and poverty reduction. Overall, our findings suggest that past dismal growth performance and poverty trends in the Democratic Republic of Congo (DRC) are due to sub-optimal investment in agricultural sector. Our results suggest that optimal level of agricultural investment paves the way to achieving both growth and poverty goals faster than it would have been possible otherwise. Over the period 2002-2012, agricultural investment represents only 45% of its optimal levels. Under the optimal investment scenario, agricultural GDP grows faster. However, agricultural GDP growth rate falls significantly behind that of non-agricultural GDP, and thus delay the achievement of growth and poverty goals. Simulation results suggest that additional agricultural investment coupled with improved agricultural inputs productivity will speed up the country’s pace toward achieving growth and poverty reduction targets: a 10% increase in labour productivity combined with a 10% increase in land productivity reduces by 18 years the amount of time within which the CAADP growth goal will be reached and increases the pace of poverty reduction.

A Two-Sector Model of Economic Growth with Endogenous Technical Change and Pollution Abatement

We provide insights into the relationships between technological development, economic growth, and pollution accumulation using a two-sector model of economic growth with endogenous technical change. In the model, output is produced using a polluting resource. Production can be used for either consumption or abatement of pollution. Scientists can be allocated between two research activities: resource-saving and abatement-augmenting technologies. Our results indicate conditional path dependency. Specifically, when the innovative capacity in the resource-saving research sector is sufficiently high, scientists are allocated to improve only the resource-saving technology, independently of the state of the technologies and environment. Consequently, the allocation of researchers is path-independent. When the innovative capacity in the abatement-augmenting research sector is sufficiently high, the optimal allocation of researchers depends on the initial level of the pollution stock or technologies but eventually will be directed to improve the abatement technology. We further characterize the optimal steady-state and off-steady-state dynamics and show that green growth is always socially optimal. By using a two-sector model, we address a lack of attention to multi-sector growth models in neoclassical growth theory and show that distinct results and transitional dynamics can emerge.

On the implications of tourism specialization and structural change in tourism destinations

We explore the relationship between tourism specialization and structural change in an endogenous growth model, analyzing its implications for both economic growth and tourist flows. We consider a two-sector economic growth model where the development of tourism activities generates a production externality and a structural change, which modifies the resources-use intensity, ultimately affecting tourist flows. We characterize the balanced growth path equilibrium and analyze under which conditions structural change may generate fast economic growth, providing a theoretical support for the empirical evidence on tourism countries. We also show that structural change may alternatively lead to stages of rejuvenation, stagnation, or decline consistently with what advanced by the tourism area life cycle hypothesis. By combining these different results, we also show that an eventual phase of decline generated by structural change does not necessarily have to be interpreted as a poor economic outcome since there might exist a bell-shaped relationship between residents’ income and number of visitors.

Fractal attractors in economic growth models with random pollution externalities.

We analyze a discrete time two-sector economic growth model where the production technologies in the final and human capital sectors are affected by random shocks both directly (via productivity and factor shares) and indirectly (via a pollution externality). We determine the optimal dynamics in the decentralized economy and show how these dynamics can be described in terms of a two-dimensional affine iterated function system with probability. This allows us to identify a suitable parameter configuration capable of generating exactly the classical Barnsley's fern as the attractor of the log-linearized optimal dynamical system.

A model of economic growth with physical and human capital: The role of time delays.

This article aims at analysing a two-sector economic growth model with discrete delays. The focus is on the dynamic properties of the emerging system. In particular, this study concentrates on the stability properties of the stationary solution, characterised by analytical results and geometrical techniques (stability crossing curves), and the conditions under which oscillatory dynamics emerge (through Hopf bifurcations). In addition, this article proposes some numerical simulations to illustrate the behaviour of the system when the stationary equilibrium is unstable.

A two-sector model of economic growth with social capital accumulation

In this paper we analyze a two-sector growth model in which the utility function is not additively separable in consumption and “quality leisure time”. Differently from the main body of theoretical literature on quality leisure, we assume that the “productivity” of leisure is not determined by the stock of human capital but instead by the quality of social environment, which in turn depends on the joint action of the economy-wide average leisure and of the stock of social capital. In this context we show that the time evolution of social capital may exhibit an inverted-U shaped path, according to which the stock of social capital, initially increasing, becomes definitively decreasing. This result is consistent with several empirical studies about the time evolution of social capital in industrialized economies (see e.g. Robert Putnam, 1995, 2000). Furthermore, we show that the inverted-U shaped evolution of the stock of social capital can be observed only if the balanced growth path is locally indeterminate.

Global stabilization of the Hamiltonian system in the two-sector economic growth model

In optimal control problems with infinite time horizon, arising in economic growth models, the analytical solution can be derived in specific cases only. This fact is explained, first of all, by nonlinear character of the Hamiltonian system arising in the Pontryagin maximum principle. Another difficulty is connected with the so-called transversality condition which describes the asymptotic behavior of adjoint variables at the infinite time.In the paper, a synthesis of optimal trajectories is carried out. Obtained results allow to conclude that the nonlinear stabilizer ensures global stabilization of the Hamiltonian dynamics. The structure of nonlinear stabilizer is based on the qualitative theory of differential equations. Under assumption on existence of a saddle steady state an “eigen–plane” is constructed by two eigenvectors corresponding to negative eigenvalues. Relations describing “eigen-plane” allow to exclude adjoint variables from (a) the Hamiltonian dynamics and (b) optimal control representations at the steady state neighborhood. So we obtain (a) the stabilized dynamics independent from adjoint variables, and (b) the structure of the nonlinear stabilizer. The provided analysis of the Hamiltonian system argues that the suggested nonlinear stabilizer ensures global stabilization of the Hamiltonian dynamics.

Construction of a regulator for the hamiltonian system in a two-sector economic growth model

We consider an optimal control problem of investment in the capital stock of a country and in the labor efficiency. We start from a model constructed within the classical approaches of economic growth theory and based on three production factors: capital stock, human capital, and useful work. It is assumed that the levels of investment in the capital stock and human capital are endogenous control parameters of the model, while the useful work is an exogenous parameter subject to logistic-type dynamics. The gross domestic product (GDP) of a country is described by a Cobb-Douglas production function. As a utility function, we take the integral consumption index discounted on an infinite time interval. To solve the resulting optimal control problem, we apply dynamic programming methods. We study optimal control regimes and examine the existence of an equilibrium state in each regime. On the boundaries between domains of different control regimes, we check the smoothness and strict concavity of the maximized Hamiltonian. Special focus is placed on a regime of variable control actions. The novelty of the solution proposed consists in constructing a nonlinear stabilizer based on the feedback principle. The properties of the stabilizer allow one to find an approximate solution to the original problem in the neighborhood of an equilibrium state. Solving numerically the stabilized Hamiltonian system, we find the trajectories of the capital of a country and labor efficiency. The solutions obtained allow one to assess the growth rates of the GDP of the country and the level of consumption in the neighborhood of an equilibrium position.

Investigating a two-sector model of economic growth with the Cobb-Douglas production function

The optimum solution to a two-sector model of economic growth with the Cobb-Douglas production function is described. One of the phase coordinates is maximized at the end point of time. The planning horizon is finite, fixed, and sufficiently large. The solution is based on the Pontryagin maximum principle, which contains the necessary optimality conditions. The optimality of an extreme solution developed on the basis of the maximum is determined. A constructive description of the optimum solution is suggested.

Stability Analysis of Two-Sectors Stochastic Economic Growth Model

In the paper, we investigate the stability of a two-sector economic growth model under stochastic case. A two-dimensional stochastic differential system is deduced by Ito’s formula, by using Lyapunov function methods, whether the growth rates of physical capital and human capital are exponentially stable or unstable depends on the values for parameters. Finally, we also illustrate the results with two examples.

A Discrete Two-Sector Economic Growth Model

This paper studies a key model in economic theory—the two-sector growth model—with an alternative utility function. We show that the system has a unique stable equilibrium when the production functions take on the Cobb-Douglas form. We also simulate the model and demonstrate effects of changes in some parameters.

A two-sector economic growth model with optimal labor and capital allocation

In this paper, a two-sector growth model with optimal labor force and capital allocation is given. By treating the quantities of the labor force and capital in the consumption production sector as the control variables in the model, we obtain a two-dimension dynamical system from solving the household utility maximum problem. It is proved that the system has a unique nonzero equilibrium which is a saddle, so there exists an optimal labor force and capital allocation process in the economic growth. The capital accumulation and consumption production strictly increase along the growth path. At the end of this paper, a numerical computation is given to present the allocation process of capital and labor.

Indeterminacy and labor augmenting externalities

We study a two-sector model of economic growth with labor augmenting external effects. Using general specifications of the technologies, we derive necessary and sufficient conditions for local indeterminacy. We show that, when the investment good sector is capital intensive at the private level, the necessary condition for the growth ray to be indeterminate is that the cost of forgoing consumption is not too high. When the consumption good sector is capital intensive, indeterminacy requires that the depreciation of the capital stock is not too low and that utility is not too concave.

Les effets du progrès technique spécifique sur la durée de vie du capital et les mesures de productivité

<titre>R&#233;sum&#233;</titre> Nous proposons, dans cet article, un mod&#232;le de croissance &#233;conomique &#224; deux secteurs avec dur&#233;e de vie du capital endog&#232;ne et progr&#232;s technique incorpor&#233;. Nous montrons qu&#8217;un choc de progr&#232;s technique sp&#233;cifique &#224; l&#8217;investissement modifie la dur&#233;e de vie optimale du capital et biaise les mesures traditionnelles de productivit&#233; totale des facteurs. L&#8217;importance quantitative de ce ph&#233;nom&#232;ne d&#233;pend fortement du type de progr&#232;s technique sp&#233;cifique consid&#233;r&#233;.

New Evidence on Balanced Growth, Stochastic Trends, and Economic Fluctuations

The one-sector Solow-Ramsey growth model informs how most modern researchers characterize macroeconomic trends and cycles, and evidence supporting the model's balanced growth predictions is often cited. This paper shows, however, that the inclusion of recent data leads to the balanced growth predictions being rejected. An alternative balanced growth hypothesis---that the ratio of nominal consumption to nominal investment is stationary---is put forward, and new measures of the stochastic trends and cycles in aggregate US data are derived based on this hypothesis. The contrasting behavior of real and nominal ratios is consistent with a two-sector model of economic growth, with separate production technologies for consumption and investment and two stochastic trends underlying the long-run behavior of all macroeconomic series. Empirical estimates of these stochastic trends are presented based on a structural VAR and the role played in the business cycle by shocks to these trends is discussed.

A two-sector economic growth model with labor force transfer

In this paper, a two-sector growth model is given. The labor force transfer process from agricultural sector to industrial sector is exogenous determined. By introducing the labor force transferring function, a two-dimension nonautonomous differential equation is obtained. The results of the model manifest that the labor force transfer delays industrial sector growth and accelerates the agricultural sector growth. It is proved that the solution of the model is asymptotic stable. By the numerical analysis, the economic growth and labor force transfer is presented under the specific parameters.

On Intersectoral allocations, factors substitutability and multiple long-run growth paths

This article considers a two-sector model of economic growth with “labour-augmenting” intersectoral external effects stemming from the aggregate capital stock. It is shown that equilibrium balanced growth paths with a non-trivial labour allocation scheme become available. A set of sufficient conditions for the existence of multiple equilibrium growth rays is provided and their determinacy properties are then characterised. Finally, examination of a parameterised C.E.S. economy illustrates the central role of non-unitary values for the elasticity of substitution in the multiplicity issue.