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Nonhomothetic Preference, Endogenous Preference Structure and Structural Change
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TitleNonhomothetic Preference, Endogenous Preference Structure and Structural Change  
AuthorLi Shangao and Gong Liutang  
OrganizationPeking University 
Key WordsNonhomothetic Preference; Endogenous Preference Structure; Structural Change; ABGP; SBGP 
AbstractThis paper constructs a economic growth model with three sectors such as agriculture, manufacturing and services, and studies the process of structural change from a preference perspective. This paper regards preference structure change as an endogenous behavior of agents’ independent decision. The change of subsistence consumption in agriculture depends primarily on agricultural income and agricultural labor input, and the change of self-provision of services depends primarily on services income and the technological complexity in services. Endogenous preference structural change induces consumption structural change and production structural change, which forms a comprehensive picture of economic structure change. This paper characterizes sectoral balanced growth path (SBGP) and aggregate balanced growth path (ABGP), and analyzes the character of sectoral structural change. It also analyzes the nature of aggregate economic growth combining with generalized balanced growth path (GBGP), and combines economic growth theory and structure change theory ingeniously.  
Serial NumberWP274 
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