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Quantity Measurement, Balanced Growth, and Welfare in Multi–Sector Growth Models


Time:2:00pm - 3:30pm, Apr 11, 2019

Venue:Room 606, School of Economics, Peking University

Speaker:Akos Valentinyi

(University of Manchester, CERS–HAS, and CEPR)





Multi-sector models use numeraires to aggregate whereas the NIPA use the Fisher index. Since the resulting GDP statistics differ considerably, we must choose one aggregation method to compare model and data GDP. For a model of structural change, we show that the numeraire investment offers the least restrictive way of constructing a balanced growth path (BGP), but the Fisher index is often a measure of welfare changes and captures the growth slowdown due to Baumol’s Costs Disease. We advocate to construct the BGP with the numeraire investment but to connect model GDP calculated with the Fisher index to the data.




Akos Valentinyi is Professor of Macroeconomics at the University of Manchester, a research fellow at the Centre for Economic Policy Research in London, and a senior research fellow at the Institute of Economics, Centre for Economic and Regional Studies of the Hungarian Academy of Sciences. Previously, he has been taught at University of Southampton, and Cardiff Business School. He also has been the Head of Research at the National Bank of Hungary for two years. He is a graduate of the University of Economics in Budapest and completed his PhD studies in Economics at the European University Institute in Florence in 1997. Valentinyi’s research includes economic growth and development with recent primary focus on structural change. He has been published in the American Economic Review, the Review of Economic Studies among others. He is currently the managing editor of the Manchester School.