Discussion paper

DP3300 Structural Change and the Kaldor Facts of Economic Growth

We present a model in which two of the most important features of the long-run growth process are reconciled: the massive changes in the structure of production and employment; and the Kaldor facts of economic growth. We assume that households expand their consumption along a hierarchy of needs and firms continuously introduce new products. In equilibrium industries with an expanding and those with a declining employment share co-exist, and each such industry goes (or has already gone) through a cycle of take-off, maturity, and stagnation. Nonetheless macroeconomic aggregates grow pari passu at a constant rate.


Zweimüller, J and R Foellmi (2002), ‘DP3300 Structural Change and the Kaldor Facts of Economic Growth‘, CEPR Discussion Paper No. 3300. CEPR Press, Paris & London. https://cepr.org/publications/dp3300