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Structural change and domestic technological capabilities

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Structural change and domestic technological capabilities

Author: Katz, Jorge Physical Description: páginas. 55-68 Date: August 2006 ECLAC symbol: LC/G.2312-P


This paper examines the role of structural change as a source of
economic growth and institutional and technological change. With the
creation of new activities in the economy, significant changes occur in
institutions and in the way domestic production capabilities are organized,
which alters the ultimate sources of growth in society. This is a complex
process that involves ubiquitous externalities and new forms of clustering
and direct interdependence between economic agents that the language
of modern growth theory cannot fully capture. Neoclassical growth models
construe economic growth in terms of an institution-free equilibrium
algorithm that affords insufficient consideration to macro-to-micro
interactions, changes in the structure of production, the co-evolution of
economic, institutional and technological forces and the process of
creation and destruction of production organization capabilities that
obtains in the economy during the growth process. This paper argues
that precisely these macro-to-micro interactions and the creation of new
institutions and capabilities constitute the essence of development.