Growth and Employment in Europe: Sustainability and Competitiveness, Department of Economics, WU (Wirtschaftsuniversität Wien)
Economic Development, variety and employment
() and Andreas Pyka
Abstract: This paper studies qualitative change taking place during
economic development. In the model presented qualitative change is created
by the mergence 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 retuns 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.
Keywords: economic development, employment, multisectoral model; (follow links to similar papers)
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