Economic activity - IMACLIM: Difference between revisions
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== Modelling economic growth - Realized GDP growth is endogenous === | |||
In this multi-sectoral framework of Imaclim-R, with partial use of factors of production, the effective economic growth rate may depart from the exogenous natural growth rate trend. The structure and rate of realized growth are endogenously determined by: (i) the allocation of labor force across sectors, which is itself governed by the final demand of these sectors, and (ii) the evolution in unemployment rates, which also result from the final demand of these sectors and the constraints of installed productive capacities and their technical characteristics. | |||
First, the twelve production sectors have different productivities, captured by unitary labor requirements for a unit of production. Therefore the effective labor productivity of the economy depends on the allocation of the labor force among production sectors. For instance, the overall productivity of labor increases through structural changes that favour the reallocation of labor towards highly productive sectors. In that case, realized economic growth can be higher than the natural growth rate. Second, exogenous labor productivity gains may not be transformed into actual growth if unemployment increases due to demand shortage or constraints on installed productive capacities. | |||
Revision as of 17:51, 29 September 2016
| Corresponding documentation | |
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| Previous versions | |
| Model information | |
| Model link | |
| Institution | Centre international de recherche sur l'environnement et le développement (CIRED), France, http://www.centre-cired.fr., Societe de Mathematiques Appliquees et de Sciences Humaines (SMASH), France, http://www.smash.fr. |
| Solution concept | General equilibrium (closed economy) |
| Solution method | SimulationImaclim-R is implemented in Scilab, and uses the fonction fsolve from a shared C++ library to solve the static equilibrium system of non-linear equations. |
| Anticipation | Recursive dynamics: each year the equilibrium is solved (system of non-linear equations), in between two years parameters to the equilibrium evolve according to specified functions. |
Modelling economic growth - Realized GDP growth is endogenous =
In this multi-sectoral framework of Imaclim-R, with partial use of factors of production, the effective economic growth rate may depart from the exogenous natural growth rate trend. The structure and rate of realized growth are endogenously determined by: (i) the allocation of labor force across sectors, which is itself governed by the final demand of these sectors, and (ii) the evolution in unemployment rates, which also result from the final demand of these sectors and the constraints of installed productive capacities and their technical characteristics.
First, the twelve production sectors have different productivities, captured by unitary labor requirements for a unit of production. Therefore the effective labor productivity of the economy depends on the allocation of the labor force among production sectors. For instance, the overall productivity of labor increases through structural changes that favour the reallocation of labor towards highly productive sectors. In that case, realized economic growth can be higher than the natural growth rate. Second, exogenous labor productivity gains may not be transformed into actual growth if unemployment increases due to demand shortage or constraints on installed productive capacities.