Journal of Economic Growth

, Volume 10, Issue 2, pp 99–134 | Cite as

New Goods and the Transition to a New Economy

  • Jeremy Greenwood
  • Gokce Uysal
Article

Abstract

The U.S. went through a remarkable structural transformation between 1800 and 2000. A precipitous decline in the importance of agricultural goods in the economy was matched by the rapid ascent of a plethora of new non-agricultural goods and services. A competitive model is presented here where consumption evolves along the extensive margin. This lessens the need to rely on satiation points, subsistence levels of consumption, and the like to explain agriculture’s demise. The analysis suggests that between 1800 and 2000 economic welfare grew by at least 1.5% a year, and may be as much as 10% annually, the exact number depending upon the metric preferred.

Keywords

technological progress structural change new goods welfare indices 

JEL Classification

E13 O11 O41 

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Copyright information

© Springer 2005

Authors and Affiliations

  • Jeremy Greenwood
    • 1
  • Gokce Uysal
    • 2
  1. 1.Department of EconomicsUniversity of RochesterNew YorkUSA
  2. 2.Department of EconomicsUniversity of RochesterNew YorkUSA

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