Structural Changes and Structural Transformation in a Modern Development Economy

Abstract

Abstract:The concepts of structure and structural changes can be applied in many different ways. Relatedly, the roughest distinction is reflected in two approaches: development economics approach and econometric approach. This paper will rely on the development economics, because it seems that the econometric approach oversimplifies the structural analysis and structural changes. Development economics, which evolved through the interaction between theoretical research and empirical studies, deals with many issues related to structure and growth in less developed (developing) countries. In development economics, the economic structure analysis is observed mostly through micro and macro approach. The paper relies on a macroeconomic approach which views the economic development as a set of interrelated long-term processes of structural transformation accompanying the growth. Unlike the neoclassical approach, which makes a simple distinction of the economy to sectors producing tradable goods (with a high substitution) and sectors producing non-tradable goods, development economics studies structural adjustments of much serious complexity. Unlike other branches of economy, development economics has no universally accepted doctrine or paradigm. Instead, it is based on continuous evaluation of thinking, creating a ground for understanding the processes of modern economic development.

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