Resumen de Essays on intersectorial dynamics
My thesis aims at analyzing intersectoral dynamics through the lens of political economy and industrial organization. Since I treat technology innovation and policy determination as the equilibrium product of political processes and structural changes in the economy, I shed light on the engines and hurdles of economic development. First, I analyze the effect of technology innovation on the relative price of the productive factors. As a consequence of a technological change, the productivity of a factor may increase even when its supply increases. I analyze the determinants of this technological bias. I present a general equilibrium model, where a good is produced in the final sector using both a factor and a technology, and the technology is produced in the intermediate sector. I allow for different market structures in the intermediate sector, and I prove that both competition and a variable set of technology producers may affect the occurrence of the technological bias, since they affect the necessary nonconvexities in the equilibrium allocation. Second, I try to explain why the misallocation of resources across different productive sectors tends to persist over time. I document that there is a link between the distribution of the public expenditure across sectors and the sectoral composition of an economy. I propose a general equilibrium model that interprets this stylized fact as a reduced form representation of two structural relations, namely, the dynamic effect of the public expenditure on the future distribution of value added and the influence of the distribution of vested interests across sectors on current public policy decisions. The model predicts that different initial sectoral compositions cause different future streams of public expenditures and therefore different paces of development. Third, I construct a theoretical model that encompasses both firms' and sectors' network structure by considering a lower-dimension economic unit, that is, sector-specific establishments of multi-sectoral firms. The model suggests a reduced-form relation where aggregate production is a function of all the idiosyncratic shocks filtered by the network structure of the economy. I show that aggregate fluctuations depend on the geometry and magnitude of cross-effects across establishments, which is measured by the eigenvalues and eigenvectors of the network matrix. Moreover, the equilibrium levels and their dispersion depend on the Bonacich centrality of establishments within the network structure of the economy. Different network structures entail different aggregate volatilities due to the fact that the presence of direct relations averages out the idiosyncrasies across establishments.
