Growth and Structural Transformation

Berthold Herrendorf, Richard Rogerson, Ákos Valentinyi

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


Structural transformation refers to the reallocation of economic activity across the broad sectors agriculture, manufacturing, and services. This review article synthesizes and evaluates recent advances in the research on structural transformation. We begin by presenting the stylized facts of structural transformation across time and space. We then develop a multi-sector extension of the one-sector growth model that encompasses the main existing theories of structural transformation. We argue that this multi-sector model serves as a natural benchmark to study structural transformation and that it is able to account for many salient features of structural transformation. We also argue that this multi-sector model delivers new and sharper insights for understanding economic development, regional income convergence, aggregate productivity trends, hours worked, business cycles, wage inequality, and greenhouse gas emissions. We conclude by suggesting several directions for future research on structural transformation.

Original languageEnglish
Title of host publicationHandbook of Economic Growth
PublisherElsevier BV
Number of pages87
Publication statusPublished - 2014


  • Approximate balanced growth
  • Multi-sector growth model
  • Structural transformation
  • Stylized facts


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