In this paper we carry out an in-depth discussion of Baumol’s model of “unbalanced growth”, a fundamental reference to analyse the effects of technical progress and the long-term development of the service sector. Although some empirical evidence confirms the stylised facts of the model, its uncomfortable predictions cannot be considered as true. After 1973 productivity has slowed down in all industrialised countries and employment growth has concentrated in the slow-productivity service sector, but such outcomes are marked by high cross-country differences. Therefore, it is useful to identify what assumptions of the model may be relaxed in order to escape what we call the “stagnancy trap”. We find that new technologies and organisational improvements can expand the boundaries of the progressive sector and thus delay the asymptotic stagnation of aggregate productivity, even though they may leave the long-term tradeoff between productivity and employment growth unchanged.

“Escaping the Stagnancy Trap. Unbalanced Growth and Employment in the Services” / Sestini, Roberta; Tronti, L.. - (2002), pp. 171-208.

“Escaping the Stagnancy Trap. Unbalanced Growth and Employment in the Services”

SESTINI, Roberta;
2002

Abstract

In this paper we carry out an in-depth discussion of Baumol’s model of “unbalanced growth”, a fundamental reference to analyse the effects of technical progress and the long-term development of the service sector. Although some empirical evidence confirms the stylised facts of the model, its uncomfortable predictions cannot be considered as true. After 1973 productivity has slowed down in all industrialised countries and employment growth has concentrated in the slow-productivity service sector, but such outcomes are marked by high cross-country differences. Therefore, it is useful to identify what assumptions of the model may be relaxed in order to escape what we call the “stagnancy trap”. We find that new technologies and organisational improvements can expand the boundaries of the progressive sector and thus delay the asymptotic stagnation of aggregate productivity, even though they may leave the long-term tradeoff between productivity and employment growth unchanged.
2002
"Income Distribution, Growth and Employment"
9788849503937
02 Pubblicazione su volume::02a Capitolo o Articolo
“Escaping the Stagnancy Trap. Unbalanced Growth and Employment in the Services” / Sestini, Roberta; Tronti, L.. - (2002), pp. 171-208.
File allegati a questo prodotto
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/147911
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact