How important is structural change to economic growth?

Posted by Dietrich Vollrath on January 21, 2009 · 2 mins read

There are undeniable changes in what we produce as the economy grows. Poor economies are dominated by agriculture, then manufacturing (most of the time) tends to become an important sector, and finally as countries become rich their output and employment is dominated by services. Is growth driven by the “push” of labor and capital out of some sectors (e.g. agriculture) or the “pull” of others (e.g. manufacturing or services). Does the move from one to the other have consequences for aggregate growth rates?

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