Research projects

The process of economic growth and development is characterised by a marked pattern of change in the composition of the economy by sectors, a process known as structural change. As a country develops, the relative importance of the agricultural sector decreases while there is an increase in the importance of manufactured products and services. If the development process continues, the importance of manufacturing also starts to decline and services increase. The aim of this research project is to improve understanding of the causes of the process of structural change seen in developing economies, and therefore to improve understanding of the enormous differences in incomes between countries. In particular, the project investigates the importance of two new causes of structural change, both related to changes in the demand structure. The first of these causes is the change in the aggregated rate of investment of the economy. The second cause is the change in the distribution of income, i.e. the change in inequality in the distribution of the economy's resources.