Economic development, variety and employment

Pier Paolo Saviotti, Andreas Pyka

Publication: Working/Discussion PaperWU Working Paper

Abstract

This paper studies qualitative change taking place during economic development. In the model presented qualitative change is created by the emergence of new sectors, each of which produces an output that is different from other sectors. A system with a variable number of sectors is simulated. The model predicts that under given conditions the evolution of a sector tends to follow a life cycle in both the number of firms and in terms of employment. The cyclical behavior is determined by the balance between the increasing intensity of competition, saturating demand and increasing returns to adoption. In its present form the model is a simplified representation of the economic system, but several improvements can be introduced in order to increase its degree of realism. (author's abstract)
Original languageEnglish
Place of PublicationVienna
PublisherInst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
Publication statusPublished - 2003

Publication series

NameWorking Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"
No.35

WU Working Paper Series

  • Working Papers Series \ Growth and Employment in Europe Sustainability and Competitiveness

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