Productivity in agriculture or services has long been understood as playing an important role in the growth of manufacturing. In this paper we present a general equilibrium model in which manufacturing growth is stimulated by non-manufacturing sectors that provides goods used in both research...

This paper studies the relationship between infrastructure expenditure and endogenous growth generated by spontaneous evolution in division of labor. It identifies the necessary condition for infrastructure expenditure to take place and its equilibrium time path. Dynamic equilibrium shows that...

This paper investigates the link between overall specialization and growth, analyzing the shape of the relationship between the median of the sectoral distribution of the Balassa Index, our summary measure of overall specialization, and the level of per capita income. The median of the Balassa...

The paper uses a dynamic equilibrium model to explain the concurrence of economic growth and business cycles. Introducing durable goods into a model with ex-ante identical consumer-producers and economies of specialized learning-by-doing, the author shows that when job-shifting costs, economies...

This paper constructs a model of growth based on Adam Smith's notions of specialization and extent of the market. We seek to explain the following stylized facts. 1) The share of household production in total output has fallen over time as the economy has grown. 2) Services as a percent of GDP...