Evolutionary Micro-dynamics and Changes in the Economic Structure

The paper aims to account for the empirical stylized facts related to changes in sectoral structures that have led to the growth of services in most advanced countries over recent decades. A growth model with evolutionary microfounded structural change is developed, which formalizes the role of technical change and changes in intermediate demand as they affect the evolution of the sectoral composition of the economy and macro-economic growth. The simulated results are based on the use of the actual data, including InputOutput coefficients in the case of Germany. Three scenarios are identified, which account for the effects of a set of key parameters on changes in the structure of the economy.